The Delhi Government has launched a crackdown on bogus dealers registered under Goods and Services Tax (GST) using fake invoices. According to Delhi Government records, the Department of Trade and Taxes has been identified around 56,000 suspicious and risky dealers under various risk parameters. The department, through GST inspectors, has conducted field verifications and inspections of 16,141 suspicious dealers so far.
Deputy Chief Minister Manish Sisodia reviewed the situation twice in last month and ordered the possible strictest action against those involved in issuance of fake invoices.
According to statement from Chief Minister’s Office (CMO), the department, through GST inspectors has conducted Field verifications and inspections of 16,141 suspicious dealers so far. “Out of it, 4618 dealers have been found non-existing and bogus during inspections. These dealers are non-existing/bogus dealers who got registration in GST to defraud the Government Exchequer by issue and use of fake invoices,” Notably, the action results in blocking suspicious input tax credits of Rs 128 crore”.
A large number of GST fraud cases involving the use of fake invoices for wrong availment of Input Credit (ITC), which is further used to pay GST on Outwards Supplies has been detected since the roll out of GST by Trade and Taxes Department of Government of Delhi which is responsible for the implementation and enforcement of GST Act in Delhi.
Registration of 1,282 dealers have been cancelled so far on this account and show cause notices for cancellation have been issued to 3,221 dealers, of which proceedings are still underway, it stated.
The department has directed its tax officers to recover the entire amount of tax, interest and penalty from such dealers as well as to take other legal and criminal actions against such dealers, the statement stated.
As per government officials, besides the cancelations, 887 dealers are under the jurisdiction of Central Tax Authorities, have been sent to them for taking further
necessary action as per law input Tax Credit (ITC) of more Rs 128.30 crore has been
blocked in respect of 1526 non-existing and bogus dealers so far, so that these dealers could not be able to avail the ITC wrongly.