The central government has begun a crackdown on fake invoices created to evade Goods and Services Tax (GST) and is working on making the law stricter.
Fake invoices are typically used to make bogus input tax credit (ITC) claims, and wrongful or higher claims of GST refunds and merchandising export incentives.
Such invoices are also used to divert funds from companies, show non-existent transactions and even inflate the company's accounts when seeking loans.
41 people have been arrested in the past eight days in a fake invoice racket busted by the Directorate General of GST Intelligence (DGGI), according to a Mint report. Of the people arrested, three were chartered accountants (CAs), two from Hyderabad and one from Ludhiana, the report added.
The Institute of Chartered Accountants of India (ICAI) is taking action against the CAs for professional misconduct.
The DGGI has booked 577 cases against 2,221 entities by the eighth day of its clampdown on fake invoices.
According to a CNBC-TV18 report, GST authorities on November 20 conducted searches and surveys in 20 cities - Chennai, Ahmedabad, Hosur, Pune, Nagpur, Siliguri, Patna, Bhopal, Surat, Hyderabad, Raipur, Bhubaneshwar, Jaipur, Kanpur, Unnao, Meerut, Delhi, Bengaluru, Mumbai and Kolkata.
The government recently introduced GST e-invoicing to curb tax evasion and boost compliance. Authorities are also using artificial intelligence (AI) and data analytics to catch suspicious transactions.
Media reports suggest that The Law Committee of the GST Council has proposed an Aadhaar- like system where the registration process can be done online with a live photo and verification of biometrics and documents.
The new GST registration process is likely to be made available at banks, post offices, and GST Seva Kendras (GSKs).