Fraudulent GST claims: Govt to set up panel for designing SOP for checking fake claims

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Published: January 7, 2020 9:19 PM

The decision in this regard was taken in the 2nd National GST Conference of the Commissioners of State Tax and Chief Commissioners of Central Tax headed by Revenue Secretary Ajay Bhushan Pandey.

All major cases of fake input tax credit, export/import fraud and fraudulent refunds shall also be compulsorily investigated by investigation wing of the income tax department.

To check fraudulent GST refund claims, the government has decided to constitute a panel of centre and state officials for designing a detailed standard operating procedure (SOP). The decision in this regard was taken in the 2nd National GST Conference of the Commissioners of State Tax and Chief Commissioners of Central Tax headed by Revenue Secretary Ajay Bhushan Pandey.

“Considering fraudulent integrated goods and services tax (IGST) refund claims, it was explored to link foreign exchange remittances with IGST refund for risky and new exporter. All major cases of fake input tax credit, export/import fraud and fraudulent refunds shall also be compulsorily investigated by investigation wing of the income tax department,” an official statement said. It was also decided to constitute a committee of centre and state officers to examine and implement quick measures in a given time frame to curb fraudulent refund claims including the inverted tax structure refund claims and evasion of GST, it said. The committee will come out with detailed SoP within a week, which may be implemented across the country by January-end, it added.

A memorandum of understanding would be signed among the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the GST Network to exchange data through application program interface, from CBDT to GSTN and CBIC and vice-versa, it said. It was decided that this data should be shared on a quarterly basis, instead of being shared on a yearly basis.

It was also explored to make the GST system aligned with Financial Intelligence Unit (FIU) for the purpose of getting bank account details and transactions and also PAN-based banking transaction. It was also discussed to share data of cases involving evasion and fraudulent refund detected by CBIC with CBDT and vice versa, so that proper profiling of these fraudsters could also be done. It was also explored to provide a single bank account for foreign remittance receipt and refund disbursement, it said adding that a self-assessment declaration to be prescribed by suitable amendments in GSTR Forms in case of closure of businesses.

To undertake verification of unmatched input tax credit availed by taxpayers, it said the Central Tax Zonal offices of Mumbai and Vadodara also made presentations regarding best practices being followed by them in compliance management and revenue augmentation in their respective tax administrations.

States, namely Gujarat and Andhra Pradesh, presented the best practices followed by them. The approach of strengthening enforcement through data exchange, sharing knowledge and best practices for a common national goal that leads to enhanced compliance management and revenue augmentation and at the same time ensuring that genuine taxpayers are not harassed was welcomed by all, it added. This meeting was attended by the senior officers of CBDT, CBIC, FIU, Directorate General of Analytics and Risk Management and GSTN officials.

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