GST Evasion: Fake Credit Claims Worth Rs 19,690 Crore

• 30 Mar 2024

Why in News?

Recently, Haryana along with Delhi, stood at the top in terms of value detected in fake Input Tax Credit (ITC) claims as Goods and Services (GST) Evasion.

Key Points

• A total of 1,999 cases have been booked for fake ITC claims in India in the ongoing financial year 2023-24 (till January), involving an amount of Rs 19,690 crore.
• The amount involved in fake ITC claims in FY24 (till January) is 49% higher than Rs 13,175 crore detected in 1,940 cases in FY23.
• In terms of value detected, Haryana and Delhi stood at the top with an amount of Rs 10,851 crore,as per data. Haryana and Delhi together account for 55% of the total amount of Rs 19,690 crore detected in the fake ITC claims under GST in the current financial year.

Input Tax Credit

• It is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.
• It means at the time of paying tax on output, one can reduce the tax that has already been paid on inputs and pay the balance amount.
• Exceptions: A business under GST composition scheme cannot avail of input tax credit. ITC cannot be claimed for personal use or for goods that are exempt.

GST Council

• Article 279A - GST Council to be formed by the President to administer & govern GST. It's Chairman is Union Finance Minister of India with ministers nominated by the state governments as its members.
• The council is devised in such a way that the centre will have 1/3^rd voting power and the states have 2/3^rd.
• The decisions are taken by 3/4^th majority.