According to GST rules, this input tax credit, accrued to a firm, can be utilized to pay taxes.
Th-is was only on paper, with no real transaction taking place.The buying company then used to show the GST paid as “input tax credit”.
KOLKATA: The Directorate General of GST Intelligence (DGGI) has arrested two persons, marking the first GST fraud-related arrests from the city since the new tax regime rolled out last July.
We shall question the accused further.”Alawyer at the Sealdah Civil & Criminal Court, where the accused had been produced, said the duo had claimed that they were not directors of any of the companies involved in the racket, and were thus not liable for GST evasion.
Through the fake transactions, the buying company then used to pay GST using their input tax credit, thus defrauding the government exchequer.“We are conducting further investigations, not ruling out the existence of many more dummy companies that issued fake invoices,” said a source.