I-T profiling to help revenue dept nab fraudsters claiming fake GST credits

New Delhi, Nov 16 : The government proposes to match GST data mentioned in Form 26AS with the turnover numbers provided while filing income tax returns.
The move is aimed at identifying unscrupulous persons who try to avail or pass on input tax credit fraudulently by generating fake invoices. In such cases, the revenue department had found that checking income tax profiles of suspected entities gave the right results on the extent of tax evasion, both on direct and indirect taxes.
Sources said that there is no reconciliation of whether a suspected entity’s income tax payment is commensurate with the expected profit margin on turnover reported by him in the GST returns or additional compliance burden on taxpayers.
Only suspected fake invoice generators are being identified for serious action under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment is commensurate with the expected profit margin on turnover reported by them in the GST returns.
The revenue department explained that recently, it was noticed that many unscrupulous persons are trying to avail or pass on input tax credit fraudulently by generating fake invoices.
In a nationwide drive against fake GST invoice frauds, started last Monday, 25 arrests were made within four days. Fake invoicing is now been handled with very serious measures as this results into substantial leakage of both direct tax and indirect tax revenue.