{"id":10033,"date":"2021-01-02T21:44:44","date_gmt":"2021-01-02T16:14:44","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=10033"},"modified":"2025-10-07T23:09:10","modified_gmt":"2025-10-07T17:39:10","slug":"new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/","title":{"rendered":"How to Track fake invoice or dealer&#8217;s rackets: GSTN"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e141504662e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e141504662e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#GSTN_taken_the_measures_to_track_the_fake_invoice_dealersrackets_by_press_realize_notified\" title=\"GSTN taken the measures\u00a0to\u00a0track the fake invoice\/ dealers\/rackets by press realize notified\">GSTN taken the measures\u00a0to\u00a0track the fake invoice\/ dealers\/rackets by press realize notified<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Minimum_cash_payment_to_deter_dummy_businesses_%E2%80%93\" title=\"Minimum cash payment to deter dummy businesses: &#8211;\">Minimum cash payment to deter dummy businesses: &#8211;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Verification_of_the_new_registration\" title=\"Verification of the new registration:\">Verification of the new registration:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Cancelation_and_suspension\" title=\"Cancelation and suspension:\">Cancelation and suspension:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Minimum_Cash_Payment\" title=\"Minimum Cash Payment:\">Minimum Cash Payment:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Ease_of_Doing_Business_Precise_Targeting\" title=\"Ease of Doing Business &amp; Precise Targeting: \">Ease of Doing Business &amp; Precise Targeting: <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#A_special_All_India_Drive_of_GST_Instructions_by_CGST_SGST\" title=\"A special All India Drive of GST Instructions by CGST &amp; SGST\u00a0\">A special All India Drive of GST Instructions by CGST &amp; SGST\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#ITC_Fraud-_INR_2_lakh_crore_worth_of_fake_ITC_Claims\" title=\"ITC Fraud- INR 2 lakh crore worth of fake ITC Claims\">ITC Fraud- INR 2 lakh crore worth of fake ITC Claims<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#What_Triggered_the_Alarm\" title=\"What Triggered the Alarm?\">What Triggered the Alarm?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Estimated_fraud_size_INR_2_lakh_crore_%E2%80%93_Understanding_ITC_Fraud_How_It_Works\" title=\"Estimated fraud size: INR 2 lakh crore &#8211; Understanding ITC Fraud: How It Works\">Estimated fraud size: INR 2 lakh crore &#8211; Understanding ITC Fraud: How It Works<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#GST_Enforcement_Whats_Changing\" title=\"GST Enforcement: What\u2019s Changing?\">GST Enforcement: What\u2019s Changing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Practical_Tips_for_Businesses\" title=\"Practical Tips for Businesses :\">Practical Tips for Businesses :<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#Legal_Penalties_for_ITC_Fraud\" title=\"Legal Penalties for ITC Fraud\">Legal Penalties for ITC Fraud<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#_Impact_on_Small_Businesses_%E2%80%93_Even_genuine_taxpayers_may_face_hurdles\" title=\"\u00a0Impact on Small Businesses &#8211; Even genuine taxpayers may face hurdles:\">\u00a0Impact on Small Businesses &#8211; Even genuine taxpayers may face hurdles:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/new-measures-suggested-by-gstn-to-track-fake-invoice-dealers-rackets\/#FAQs_on_ITC_Fraud_GST_Enforcement\" title=\"FAQs on ITC Fraud &amp; GST Enforcement\">FAQs on ITC Fraud &amp; GST Enforcement<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><a style=\"font-size: 16px;\" href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/fake-GST-invoice-racket.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-10040\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/fake-GST-invoice-racket.jpg\" alt=\"www.carajput.com; Fake GST invoice Racket\" width=\"1084\" height=\"444\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/fake-GST-invoice-racket.jpg 652w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/fake-GST-invoice-racket-300x123.jpg 300w\" sizes=\"(max-width: 1084px) 100vw, 1084px\" \/><\/a><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"GSTN_taken_the_measures_to_track_the_fake_invoice_dealersrackets_by_press_realize_notified\"><\/span><span style=\"color: #000080;\"><em><strong>GSTN taken the measures<\/strong><\/em>\u00a0to\u00a0track the <em><strong>fake invoice\/ dealers<\/strong><\/em>\/<em><strong>rackets by press realize notified<\/strong><\/em><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Ministry of Finance issue new Press Release issued on dated December 23, 2020, regarding measures recommended by <a href=\"https:\/\/www.caindelhiindia.com\/blog\/45th-gst-council-meeting-key-takeaways-recommendations-etc\/\">GST Council<\/a> to curb fake dealers\/invoice rackets notified.<\/li>\n<li>The recommendations of the Law Committee as made aware are central to 4 main measures\u00a0which include:<\/li>\n<\/ul>\n<p><strong>Tightening up the verification process for new registration:<\/strong><\/p>\n<p><strong>\u00a0<\/strong> &#8211; Initiatives suggested by the GST Council to curb counterfeit dealers\/invoice rackets made aware<\/p>\n<p><strong>Suspension on the basis of data analytics and mismatches: &#8211;<\/strong> In-Person Confirmation must be performed for GST Registration, Identification of counterfeit dealers through data analysis, and suspension<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Minimum_cash_payment_to_deter_dummy_businesses_%E2%80%93\"><\/span><strong>Minimum cash payment to deter dummy businesses: &#8211;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Mandated by law 1 percent GST payment for all those risky dealers and fly-by-night operators who have uncommon large turnover and lack financial legitimacy<\/p>\n<p><strong>Ease of business<\/strong> <strong>in India<\/strong> and precise targeting in the interest of intelligently protected smaller firms.<\/p>\n<ul>\n<li>Law Committee of the GST Council&#8217;s main suggestion is to control the fresh or new registration of applicants without a commercial purpose and to remove existing counterfeit traders from the GST systems.<\/li>\n<li>These measures notified to the systemic tightening of new registrations by identifying counterfeit dealers, changes to the registration process.<\/li>\n<li>Use of Aadhaar during registration &amp; Aadhaar as the capture of details during registration would have an impact on the threat of mushrooming fake firms and ITC fraud by fly-by-night operators.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Verification_of_the_new_registration\"><\/span><strong><span style=\"color: #000080;\">Verification of the new registration<\/span>:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In Pursuant to such initiatives as set out in the notifications which specify there must now be in-person verification before registration is given to the applicant.<\/li>\n<li>Moreover, In the event that the applicant opts for Aadhaar authentication, Aadhaar Biometric Authentication will be submitted to one of the Information sharing Centers notified by the Commissioner.<\/li>\n<li>In the event that the applicant has not chosen for Aadhaar authentication, the request processing, the biometric data, and the verification of KYC must be carried out at the Verification Facilities.<\/li>\n<li>This verification process may also involve snapping pictures and verifying the applicant&#8217;s original documents uploaded to the database.<\/li>\n<li>which may impact that GST is going to move towards a better verifying regime for the registration of new business owners, with many of the steps taken in an automated environment.<\/li>\n<li>The timeline for the grant of registration to the Aadhaar Authenticated Applicant is now 7 days for the proper examination of the application.<\/li>\n<li>In order to overcome the cases of fake invoices, some extreme medical confirmation may be held out with the approval of an officer authorized by the Commissioner in a few risky cases where a person has successfully undergone Aadhaar authentication.<\/li>\n<li>Timeframe for granting registration in such cases would now be 30 days.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cancelation_and_suspension\"><\/span><strong><span style=\"color: #000080;\">Cancelation and suspension<\/span>:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In the new GST regime notified suspension\/cancellation would be based on the data analytics &amp; mismatches.<\/li>\n<li>Registration shall also be liable for cancellation if the input tax credit is used in contravention of the law of the CGST Act or if the outward supply details in FORM GSTR-1 exceed the outward supply declared in FORM GSTR-3B for one or more tax periods.<\/li>\n<li>Some rather cases would result in ITC being passed or used without payment of tax and would therefore be liable for cancellation of registration.<\/li>\n<li>These taxpayers would remain in suspension during the cancellation hearings.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Minimum_Cash_Payment\"><\/span><span style=\"color: #000080;\"><strong>Minimum Cash Payment<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In another considerable change in rules for Disposal of Dummy Businesses,<\/li>\n<li>as a framework for the implementation of the QRMP scheme with the facility&#8217;s existing eligibility limit for the use of 10 % input tax credit (ITC) by a registered person in respect of invoices where the details have not been provided by his suppliers would be reduced to 5 %.<\/li>\n<li>System &amp; framework for the implementation of the QRMP scheme with the facility w.e.f. 1 January 2021.<\/li>\n<li>It could make sure that large taxpayers carry on making purchases from small taxpayers.<\/li>\n<li>To reduce false ITC use and transfer of such credit by unscrupulous persons who usually pay no tax in cash,<\/li>\n<li>In specific in those risky cases where GST turnover does not match tax returns where the value of taxable supply other than exempt supply and zero-rated supply exceeds Rs. 50 lakh,<\/li>\n<li>Such GST registration person will not be able to use the amount of ITC available in one month. At least 1% of the liability would have to be discharged in cash.<\/li>\n<li>This kind of new change will come into force on 1 January 2021.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Ease_of_Doing_Business_Precise_Targeting\"><\/span><span style=\"color: #000080;\"><strong>Ease of Doing Business &amp; Precise Targeting:<\/strong> <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Even so, there are a few exceptions to the above requirement to limit the use of ITC to ensure Ease of Doing Business. example are\n<ul>\n<li>Where a taxpayer has paid more than INR 1 lakh as income tax each of the last 2 FYs, or<\/li>\n<li>Received a refund of unused ITC on account of a zero-rated supply or inverted duty structure of more than INR 1 lakh in the previous FYs or<\/li>\n<li>Released its liability for output tax by electronic cash legs for an amount exceeding 1% of the total amount.<\/li>\n<li>Such taxpayers may use more than 99 % of ITC to discharge their tax liability.<\/li>\n<li>the Govt Dept, PSU, local &amp; other statutory bodies are exempted from these limits on Input Tax credit utilization.<\/li>\n<\/ul>\n<\/li>\n<li>Ease of Doing Business in India for Real Taxpaying citizens, Corporate Entities and Merchants, and Effective Trying to target in the Benefit of Small And medium enterprises would therefore not have an influence,<\/li>\n<li>As the Law Committee recommended initiatives for the precise identification of possibly riskier taxpayers based on very well-set limits in the automated environment.<\/li>\n<li>In the same spirit, moreover, to control the false invoice threat, now that a registered person has not filed Form GSTR-3B for the previous two months, his Form GSTR-1 will not be created.<\/li>\n<li>A comparable limitation has been positioned on QRMP taxpayers if the form GSTR-3B is not submitted for the prior one tax period of three months.<\/li>\n<li>Above such kinds of measures are able to monitor dummy registrations and fake ITC billing to move the GST procedure towards that cleaner and more robust regime.<\/li>\n<li>A recent case found on Fake invoices:<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"A_special_All_India_Drive_of_GST_Instructions_by_CGST_SGST\"><\/span><span style=\"color: #000080;\"><strong>A special All India Drive of GST Instructions by CGST &amp; SGST\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24580\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion..jpg\" alt=\"officers launch special drive to identify fake GST registration, curb evasion.\" width=\"1080\" height=\"889\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion..jpg 1080w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion.-300x247.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion.-1024x843.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion.-768x632.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/01\/officers-launch-special-drive-to-identify-fake-GST-registration-curb-evasion.-800x659.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"ITC_Fraud-_INR_2_lakh_crore_worth_of_fake_ITC_Claims\"><\/span><span style=\"color: #000080;\"><strong>ITC Fraud- INR 2 lakh crore worth of fake ITC Claims<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The recent Group of Ministers meeting on revenue analysis raised a serious red flag \u2014 states reported over INR 2 lakh crore worth of fake Input Tax Credit claims. This massive tax evasion not only dents government revenue but could also lead to tighter compliance norms, impacting even honest businesses. With the government estimating INR 2 lakh crore Input Tax Credit fraud, Goods and services Tax enforcement is only going to get stricter. Honest taxpayers, especially SMEs, may see increased scrutiny. The safest strategy is strong internal controls, supplier due diligence, and proactive reconciliation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_Triggered_the_Alarm\"><\/span><span style=\"color: #000080;\"><strong>What Triggered the Alarm?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Fake firms availing Input Tax Credit via bogus invoices<\/li>\n<li>Inter-state Input Tax Credit rackets using mule accounts<\/li>\n<li>Goods and services Tax registration abuse (Aadhaar\u2013PAN mismatch)<\/li>\n<li>Lack of coordination between GSTN, DGGI, and State GST departments<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Estimated_fraud_size_INR_2_lakh_crore_%E2%80%93_Understanding_ITC_Fraud_How_It_Works\"><\/span><span style=\"color: #000080;\"><strong>Estimated fraud size: INR 2 lakh crore &#8211; Understanding ITC Fraud: How It Works<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 349px;\" width=\"1035\">\n<thead>\n<tr>\n<td><strong>Modus Operandi<\/strong><\/td>\n<td><strong>Description<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Bogus Invoices<\/td>\n<td>No actual supply; only invoices raised to claim ITC<\/td>\n<\/tr>\n<tr>\n<td>Circular Trading<\/td>\n<td>Goods shown as moving in a loop only on paper<\/td>\n<\/tr>\n<tr>\n<td>Layering of Entities<\/td>\n<td>Shell firms created to route fake invoices<\/td>\n<\/tr>\n<tr>\n<td><strong>Aadhaar-linked Registrations<\/strong><\/td>\n<td><strong>Fraudulent GSTINs obtained using fake credentials<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Legal Reference:<\/p>\n<ul>\n<li><em>Section 132 of CGST Act<\/em> \u2013 Offences &amp; penalties,<\/li>\n<\/ul>\n<ul>\n<li><em>Rule 86A<\/em> \u2013 Power to block Input Tax Credit if fraud is suspected<\/li>\n<li><em>Section 16(2)<\/em> \u2013 Input Tax Credit eligibility only on actual receipt of goods\/services<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"GST_Enforcement_Whats_Changing\"><\/span><span style=\"color: #000080;\"><strong>GST Enforcement: What\u2019s Changing?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In response to these frauds, enforcement agencies are tightening compliance norms:<\/p>\n<ul>\n<li>Mandatory Aadhaar authentication for all new registrations<\/li>\n<li>Real-time invoice verification through Invoice Registration Portal<\/li>\n<li>Risk-based scrutiny of Goods and services Tax returns<\/li>\n<li>More frequent DGGI raids and investigation-led assessments<\/li>\n<li>CBIC reviewing Rule 9 of CGST Rules (registration verification &amp; biometric checks)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Practical_Tips_for_Businesses\"><\/span><span style=\"color: #000080;\"><strong>Practical Tips for Businesses :<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Verify supplier Goods and Services Tax\u00a0Identification Number\u2019s on Goods and services Tax Portal<\/li>\n<li>Use e-invoice compliance tools to cross-check invoice authenticity<\/li>\n<li>Avoid vendors showing sudden Input Tax Credit spikes<\/li>\n<li>Reconcile GSTR-2B vs books monthly<\/li>\n<li>Respond promptly to Input Tax Credit mismatch notices<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Legal_Penalties_for_ITC_Fraud\"><\/span><span style=\"color: #000080;\"><strong>Legal Penalties for ITC Fraud<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 320px;\" width=\"1076\">\n<thead>\n<tr>\n<td>Offence<\/td>\n<td>Punishment (CGST Act)<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Fake ITC &gt; INR 5 crore<\/td>\n<td>Non-bailable offence + Jail up to 5 years<\/td>\n<\/tr>\n<tr>\n<td>Fake registration<\/td>\n<td>GSTIN cancelled + Input Tax Credit reversed<\/td>\n<\/tr>\n<tr>\n<td>Non-filing of returns<\/td>\n<td>Late fee + interest + Input Tax Credit ineligible<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Relevant Provisions: Section 132, Section 122, Rule 86A, Rule 9 of CGST Rules<\/p>\n<h3><span class=\"ez-toc-section\" id=\"_Impact_on_Small_Businesses_%E2%80%93_Even_genuine_taxpayers_may_face_hurdles\"><\/span><strong>\u00a0<\/strong><span style=\"color: #000080;\"><strong>Impact on Small Businesses &#8211; Even genuine taxpayers may face hurdles:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>More queries on GSTR-3B vs GSTR-2B reconciliation<\/li>\n<li>Input Tax Credit delay if supplier is flagged by DGGI<\/li>\n<li>Input Tax Credit blocked under Rule 86A, even if later restored<\/li>\n<\/ul>\n<p>And Always keep a document trail \u2013 e-way bills, proof of delivery, payment receipts, and transport records.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"FAQs_on_ITC_Fraud_GST_Enforcement\"><\/span><span style=\"color: #000080;\"><strong>FAQs on ITC Fraud &amp; GST Enforcement<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Q1. Will ITC be blocked if my supplier is fake?<\/strong><\/span><br \/>\nYes. Under Rule 86A, the department can block your Input Tax Credit even if the fraud was committed by the supplier.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q2. How can I prove I received the goods?<\/strong><\/span><br \/>\nMaintain delivery challans, e-way bills, payment proofs, and transport receipts.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q3. Can I face jail time if my accountant claimed wrong Input Tax Credit ?<\/strong><\/span><br \/>\nYes. U\/s 132, proprietors, partners, and directors can face personal liability.<\/p>\n<p><strong>Popular Article :\u00a0<\/strong><\/p>\n<p><span style=\"color: #000080;\"><strong><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/blog\/key-points-of-42th-gst-council-meeting-headed-by-fm-n-sitharaman\/\" data-cke-saved-href=\"https:\/\/carajput.com\/blog\/key-points-of-42th-gst-council-meeting-headed-by-fm-n-sitharaman\/\">Key points of 42nd GST council Meeting headed By FM N. Sitharaman<\/a><\/strong><\/span><\/p>\n<p><span style=\"color: #000080;\"><strong><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/learn\/salient-features-of-new-proposed-gst-system-in-india.html\" data-cke-saved-href=\"https:\/\/carajput.com\/learn\/salient-features-of-new-proposed-gst-system-in-india.html\">SALIENT FEATURES OF NEW GST SYSTEM IN INDIA<\/a><\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GSTN taken the measures\u00a0to\u00a0track the fake invoice\/ dealers\/rackets by press realize notified Ministry of Finance issue new Press Release issued on dated December 23, 2020, regarding measures recommended by GST Council to curb fake dealers\/invoice rackets notified. The recommendations of the Law Committee as made aware are central to 4 main measures\u00a0which include: Tightening up &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9108],"tags":[9573,9575,9576,9572],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10033"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=10033"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10033\/revisions"}],"predecessor-version":[{"id":30152,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10033\/revisions\/30152"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=10033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=10033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=10033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}