Fraudulent input tax credit claims worth Rs 450 crore have been uncovered by the Directorate General of Goods and Services Tax Intelligence.
A Financial Express report said that fake bills were made and sold to businesses looking to claim this undeserved credit. A portion of this credit was then supplied to the provider of the fraudulent bills.
Close to Rs 2500 crore worth of fraudulent claims have been made since the roll-out of the new tax regime in July 2017 so far.
Experts say that the businesses would claim B2C (Business to customer) transactions as B2B (Business to business) transactions leaving the recipient would claim input tax credit.
The government has issued summons to the entities involved in the nexus. The provider of the counterfeit bills is reportedly absconding.
He would deny accrued revenue to the government from the B2C transactions as B2B transactions would be a liability till a final B2C supply occurs.
Tax payers have claimed Rs 1.6 lakh crore till December last year
The Central Board of Indirect Taxes and Customs (CBIC) is currently carrying out a year-long exercise to investigate into the 50,000 claimants, who 90 percent of the total claims filed.
The report further quoted tax officials saying that government feels that the assesses require more time to adjust to the new system.
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