In order to crack down on fake invoicing and fraudulent input tax credit (ITC) refunds under the goods and services tax (GST), the Budget has introduced strict penal provisions under the GST legislation, making it a non-bailable offence. The move has already been approved by the GST Council. Besides, Finance Minister Nirmala Sitharaman announced that the new GST return framework and e-invoicing would be implemented from April 1, to improve compliance and plug the tax revenue leakages.
According to the government, the masterminds of fraudulent ITC rackets involve people like daily wagers, rickshaw pullers etc. As per the changes in the law, those fraudulently availing ITC without invoice or bill in cases where the amount of tax evaded or the amount of ITC wrongly availed or utilised or refund claimed worth over Rs 5 crore will be punishable with imprisonment for a term which may extend to five years and with fine and shall be cognizable and non-bailable.