Now Automobile Traders Under GST Scanner for Fake Invoices Scam


Share post:

Arpit Kulshrestha

GST Investigation Will Start for Automobile Traders

The tax officials are investigating a section of automobile dealers who have allegedly issued fake invoices without offering any service which is an unlawful action under goods and services tax (GST law). The authorities are going to ask the car dealers to prove that general insurance companies have received their services. According to a business newspaper, the investigators have somewhat distrusted that auto dealers marketed insurance plans that earned them commissions above what insurance regulations offered.

The dealers have issued fake GST invoices and based on that insurance companies declared input tax credits, without an essential supply of services, said the two officials who are in knowledge of the investigation.

It should be noted that the cap ranges from 15% to 20%, depending on the products recommended by India’s Insurance Regulatory and Development Authority of India (IRDAI). IRDAI separated commission restrictions and put an overall cap on operating costs and commissions as of April 1.

With this, there is a 100% fine and the registration of the duplicate invoice generator could be also disapproved. The unlawful action under the GST law is not bailable. In the GST system, generating an invoice in the absence of supply leads can take the responsibility to a jail term of up to five years, if the money is equal to or more than INR 5 crore. Additionally, a penalty of 100% will also be charged.

Read also: Complete Information Related to Bogus Invoicing Under GST

A top government source told Business Daily that the said amount of tax evasion, in this case, is over INR 12,500 crore, which is significantly more than the initial estimate of INR 1,000 crore. As the investigation goes deeper, we can discover a connection between insurance firms and numerous such intermediaries who are defying the law to evade taxes. The problem will soon be resolved.

The next step is to broaden the investigation the Directorate General of GST Intelligence (DGGI) has started in opposition to 16 insurance commissions as high as 60%-70% to middlemen like these, and then using input tax credit on the bills issued in the name of marketing and sales services.

Disclaimer:- “All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check.”

Published by Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
View more posts


Source link


Please enter your comment!
Please enter your name here


Related articles

World Tourism Day 2023: History on wheels; Explore Indian cultures on these iconic heritage trains

World Tourism Day is celebrated every year on September 27 to focus on...

West Bengal’s Kiriteshwari village awarded Best Tourism Village of India title for its harmony and unique architecture

A comparatively new immaculate red-and-white temple stands beside the ruins of a 1000-year-old...

World Tourism Day 2023: Date, history, significance

World Tourism Day 2023: The joy of exploring the world is like...

Central London’s secret ‘James Bond’ tunnels may become a tourist attraction

A warren of tunnels beneath central London, once used by the spies who...