Businesses, govt spar over fraudulent ITC claims and imprisonment under GST

Companies may challenge jailing provisions, say Section 69 of central GST Act is arbitrary as it empowers commissioners to arrest persons they have "reasons to believe" have claimed fraudulent ITC

While the government has decriminalised 48 sections of the Companies Act, a controversy is brewing over jail provisions in the GST laws.

The government defends the jail provisions for clamping down on fictitious firms and fraudulent claims of the input tax credit (ITC) under the goods and services tax (GST) regime, while businessmen and tax experts find fault in the extant provisions.

Companies are likely to file a petition in the Orissa High Court (HC) soon, challenging constitutional validity of these provisions. Similar such cases are pending in the Bombay and Delhi high courts too. 

According to the Orissa HC’s