Why Input Tax Credit should be Abolished
₹6,000cr GST scam busted in Gujarat
The state goods and services tax (SGST) department on Saturday unearthed the largest ever fake billing scam in Gujarat after GST’s implementation. The department has initiated a rigorous probe against some 282 firms involved in the scam wherein fake bills of Rs 6,030 crore have been generated to fraudulently claim input tax credit. Data shared by SGST department shows these bogus invoices were used to evade taxes of Rs 910 crore.
These bogus bills generated were used to fraudulently claim input tax credit without actual movement of goods.
There may be many more GST Scams running in to thousands of crores all over India which have not been caught so far.
The root cause is Input Tax Credit system in GST. The initial objective was to tempt maximum number of businesses to register under GST which has been achieved.
Therefore government should seriously consider removing the provision of Input Tax Credit. The GST rates should be reduced after removing input tax credit as has been done for Restaurants.
Another advantage will be that filing of GST returns will become very simple as there will not be any need to match the invoices for claiming input tax credit.
Local Circles are requested to take up this issue with FM and GST Council. more
Reforms are must and fast yo REDRESS these Challenges over Constitutional Rule. more