Govt to take strict action against businesses generating fake invoices: Thakur

The government Monday warned businesses against generating fake invoices to evade GST, saying tax officers will take strict action in such cases.

Speaking on the second anniversary of the implementation of the goods and services tax (GST), Minister of State for Finance Anurag Thakur said the menace of fake invoice needs to be checked to ensure that honest taxpayers do not suffer and the government does not lose revenues.

"The government will take strict action against those involved in generating fake invoices. The menace of fake invoices needs to be checked as the actions of few unscrupulous traders make the majority of honest taxpayers uncompetitive and cause loss to government revenue. The government is "serious about curbing this menace", he said.

He also urged GST officers to be sensitive to the concerns of honest taxpayers saying their interaction with trader moulds public opinion about GST.

"Therefore, I urge all GST authorities to remember at all times that as public servants, they serve the trade by being sensitive to their concerns and resolving their genuine difficulties in accordance with the law. It is only through this partnership that we can achieve the goal of 'one nation, one market, one tax'," he added.

Hoping that trade and industry will urge their constituents to shun bad practices and comply with the law, Thakur said the policy of the government would be: "imandaar trader se bair nahi, fake invoices walon ki khair nahi" (no honest trader will be troubled but those generating fake invoices will not be spared).

Finance Minister Nirmala Sitharaman in a written reply in the Lok Sabha on Monday said GST officers have booked 535 cases of fake invoices involving a total fraudulent claim of Rs 2,565 crore of input tax credit (ITC) and arrested 40 persons so far in the current financial year.

In 2018-19, 1,620 cases of fake invoices were registered involving fraudulent ITC claim of Rs 11,251 crore under the GST. As many as 154 persons were arrested.

The GST Council, chaired by Union finance minister and comprising state counterparts, last month decided to launch pilot project under which businesses above a specified threshold will have to generate e-invoice for B2B (business-to-business) sales from January 1.

As per the plan of e-invoice being worked out by the tax officers, entities with a turnover of more than Rs 50 crore will be required to generate electronic invoices on a government portal for B2B sales.

GST, which subsumed 17 local taxes, was rolled out on July 1, 2017. It currently has four slabs -- 5, 12, 18 and 28 per cent. On top of the 28 per cent slab, a cess is levied on automobiles, luxury, demerit and sin goods