Fraudulent Input Tax Credit schemes prompt arrests under CGST provisions after probe reveals fake invoices and ITC circulation
Investigation revealed a network of sham firms issuing fake GST invoices and rotating fraudulent Input Tax Credit among non existing entities to obscure the trail, then passing ITC to end recipients who paid by bank and received cash back after commission; searches yielded cash, corporate paraphernalia, digital signature devices, payment instruments and identity documents, and the conduct is being prosecuted under the CGST Act with arrests made and further investigations continuing.

Input Tax Credit fraud exposed; arrests and provisional attachments enforced under CGST provisions to curb fake-invoice GST evasion.
Investigation found a network of fictitious suppliers and shell firms issuing fake invoices to enable wrongful availment of Input Tax Credit; funds were routed through bank accounts and withdrawn in cash, indicating money laundering. Searches, summonses and provisional attachment of property and bank accounts were undertaken under the CGST Act when authorised signatories absconded or evaded investigation, leading to arrests and remands while further probe continues.

False GST refund claims uncovered, triggering arrests, recovery measures and withholding of pending refunds under CGST law.
Investigations found coordinated creation of non operational firms in Delhi NCR submitting fabricated invoices to claim accumulated Input Tax Credit refunds without actual supply of goods. Two individuals obtained KYC documents from proprietors to operate the scheme; searches, confessional statements and arrests followed. Administrative responses included payment of some refunds, partial recovery and withholding of pending claims, and criminal proceedings under Section 69 of the CGST Act.

GST rate change: higher tax on mobile phones, unified matches rate, reduced MRO services with full input tax credit.
The Council recommended increasing the GST rate on mobile phones and specified parts to correct an inverted duty structure; rationalising all types of matches to a single unified rate to address classification issues; and reducing the GST rate on aircraft Maintenance, Repair and Overhaul services with full input tax credit while shifting the place of supply for B2B MRO services to the recipient's location to support domestic MRO development. Notifications were proposed to give effect to these recommendations.

Linking of GST returns to prevent evasion: connect GSTR-1 with GSTR-3B, match credits to supplier data and boost IT capacity.
Recommendations direct an incremental IT-led GST transition: first link outward supplies in FORM GSTR-1 to liability in FORM GSTR-3B, then link input tax credit in FORM GSTR-3B to FORM GSTR-2A; implement Aadhaar authentication and spike rules to prevent evasion; augment IT capacity through hardware procurement and deploy sixty additional staff on time-and-materials terms, with continued technical oversight from the vendor representative and an expedited implementation timetable.

Net cash tax liability interest to be charged on delayed GST payments, with procedural relaxations and deferments following.
Recommendations revise GST procedures: interest on delayed tax to be charged on the net cash tax liability from 01.07.2017; extended windows for revocation of registration and filing of annual returns with reliefs for smaller taxpayers; waiver of FORM GSTR-1 for certain taxpayers; special compliance procedures for corporate debtors in CIRP; deferment of e-invoicing and QR code implementation for specified classes; extensions for e-wallet finalisation and import exemptions; restrictions on passing input tax credit pending physical verification and KYC; and rule amendments on ITC reversal for capital goods, export refund calculation and Aadhaar authentication.

IGST refund fraud investigation leads to arrests and ongoing probes into circular trading and fake supplier networks.
Fraudulent IGST refund claims were enabled by a controlled network of non existent or circular trading suppliers issuing invoices without commensurate purchases, allowing exporters to pass on ineligible input tax credit and obtain refunds; two directors were arrested under Section 69(1) in connection with alleged offences under Section 132(1)(b) and 132(1)(c), and investigations into other suppliers and persons continue.

Issuance of fake invoices prompts arrest and GST investigation into fraudulent ITC and IGST refund claims.
DGGI initiated an investigation into the issuance of fake invoices by three firms that enabled buyers to claim ineligible ITC and facilitated fraudulent IGST refund claims; data analytics tied the conduct to a prior exporter operation and identified large aggregate invoice values and tax credits. A director was arrested under Section 69(1) CGST Act in connection with alleged offences under Sections 132(1)(b) and 132(1)(c), while investigations into other principals and related diversion of duty free imports continue.

GST registration problems: CBIC to host webcast addressing taxpayer queries and providing procedural guidance via live stream.
The Directorate General of Systems together with the Directorate General of Taxpayer Services will host a live webcast to respond to taxpayer queries and provide procedural guidance on GST Registration, delivered via a public video stream with an online link for real-time participation and viewing to assist taxpayers with registration-related compliance issues.

Fraudulent input tax credit scheme uncovered; arrests made and prosecution initiated under GST anti-evasion provisions.
Investigation disclosed a network of 23 shell companies issuing invoices without actual supply to generate and pass on fraudulent Input Tax Credit, using banking transactions to simulate legitimacy. The scheme implicated creation of dummy firms, issuance of fake invoices to enable ineligible ITC claims, and seizure of electronic evidence. Allegations were framed under Section 132 of the CGST Act and arrests effected under Section 69(1); the alleged offences are cognizable and non-bailable, and further investigation is ongoing.

Interest Subvention Scheme modification removes Udyog Aadhaar requirement for GST-registered MSMEs; PAN or bank classification permitted for others.
Modification of the Interest Subvention Scheme removes the requirement to produce a Udyog Aadhaar Number for units registered under Goods and Services Tax. Units not registered under GST may instead submit a Permanent Account Number or have their loan account classified as an MSME by the lending bank to meet eligibility documentation requirements under the scheme.

Quarterly GST filing for eligible MSMEs tied to composition levy option, enabling simplified quarterly payment under GST.
Quarterly filing and payment under the GST new return model is available to MSMEs by permitting quarterly returns and payments where taxpayers opt for the composition levy, and the Department of Revenue has indicated no proposal to extend quarterly payment beyond the composition levy route at this stage.

Fraudulent input tax credit claims via circular trading resulted in arrests and investigation under GST penal provisions.
Officers uncovered a circular trading scheme where three related persons used 17 paper firms and fake invoices to wrongfully avail and pass on Input Tax Credit and to file refund claims; the inquiry revealed a hawala conduit and alleged bank collusion, leading to arrests under Section 69(1) and invocation of Section 132 offences under the CGST Act, with further investigation pending.

GST invoice lottery to incentivise B2C billing and curb tax evasion through monthly consumer lucky draws.
A proposed GST lottery would require consumers to scan and upload B2C invoices via a GSTN-developed mobile app to enter monthly lucky draws; eligibility has no invoice value threshold, prize tiers include a bumper and state-wise awards, and funding is to come from the consumer welfare fund derived from anti-profiteering proceeds.

GST revenue collection shows year-on-year domestic growth and IGST settlements affecting central and state shares.
GST revenue for February 2020 totaled Rs. 1,05,366 crore across CGST, SGST, IGST and Cess, with 83.53 lakh GSTR 3B returns filed for January up to 29 February. Regular IGST settlements transferred Rs. 22,586 crore to CGST and Rs. 16,553 crore to SGST, producing post settlement receipts of Rs. 43,155 crore (CGST) and Rs. 43,901 crore (SGST). Domestic transactions rose 12% year on year, total receipts including imports rose 8%, while GST on imports declined 2%.