Abolish Input Tax Credit system
“Trading firm director held in ₹10-crore GST scam
The Thane wing of the CGST arrested Vinit Agarwal, director of Hemraj Devkarandas Metals and Minerals Ltd, for availing Input Tax Credit to the tune of Rs 10 crore by submitting fake invoices. “
The Input tax Credit claimed is 400% of GST paid. This means there is a big opportunity to claim input tax credit through fake invoices. Only few cases of fraud are being caught. Many cases may not be caught due to corruption.
It is high time GST Council and Finance Ministry get the GST Act amended to abolish the Input Tax Credit system. The GST rates could be reduced for inputs used for manufacturing to ensure a reasonable GST burden on end consumer. The GST rate of 5% on Restaurants without input tax credit is working fine.
Removal of Input Tax credit will make GST a good and simple tax. The filing of multiple Returns and matching invoices to check input tax credit claimed, is a time consuming process, will be avoided. Expenses incurred on filing Returns through CAs will be reduced. Life of GST payer will become simple and easy. more