The Finance Minister Nirmala Sitharaman in the Budget Speech 2021-22 proposed the Provisional Attachment of Assets of those who are involved in the GST Fake Invoice of more than Rs.2 crores.
“A new provision is being inserted in the Customs Act (section 114AC) to prescribe penalty in specific cases where any person claims refund of tax or duty discharge, using fraudulent invoices, on exports of goods,” Sitharaman said.
The new provision section 114AC is inserted in the GST Act in respect of the Penalty for fraudulent utilisation of input tax credit for claiming refund.
Section 114AC says, “Where any person has obtained any invoice by fraud, collusion, willful misstatement or suppression of facts to utilize input tax credit on the basis of such invoice for discharging any duty or tax on goods that are entered for exportation under a claim of refund of such duty or tax, such person shall be liable for a penalty not exceeding five times the refund claimed.”
This staunch step of the government against the fraudsters will curb the practice of making fake GST invoices and wrongful availment of ITC.
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