The Goods and Services Tax department, Haryana has asked the GST officials to block the input tax credit on certain conditions.
A circular has been issued in this regard by the department said that input tax credit which are bogus, or fake taxpayers, non-functional firms, excess transitional credit, and inadmissible credit shall be blocked under the Goods and Services Tax law.
This is in the light of recent GST evasion cases wherein the defaulters availed input tax credit wrongly by issuing fake invoices, through shell companies.
Goods and Services Tax returns are being simplified after which the system of input credits will be streamlined. Till then, the credits are self-certified. In the last stage of returns simplification, the credit will be blocked if the seller has not paid GST to the government.
Recently, a huge GST evasion was unearthed by the department in Haryana for allegedly floating fake companies and fraudulently claiming input tax credit on transactions worth over Rs 100 crore. In connection with this, two were arrested and seven tax officials were suspended.
