41 arrested in fake invoice case; three CAs face disciplinary action
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DGGI will inform accounting rule maker and professional regulator The Institute of Chartered Accountants of India (ICAI) to take action against the three CAs for professional misconduct, said the official, who spoke on condition of anonymity. Two of the CAs are from Hyderabad and one from Ludhiana. They are accused of having a role in arranging for fake invoices of fictitious firms and in wrongfully availing tax credits.
In the nationwide crackdown on people abusing the GST system using fake invoices, DGGI has booked 577 cases against 2,221 entities in the last eight days, said the official quoted above.
On Friday, GST authorities held searches and surveys in 20 cities including Chennai, Ahmedabad, Pune, Nagpur, Hyderabad, Jaipur, Delhi, Bengaluru, Mumbai and Kolkata.
Fake invoices are used to evade Goods and Services Tax (GST) and income tax and to divert funds from companies. These are also used for showing non-existent transactions to jack up figures on books to obtain loans from banks. These are also used to wrongfully claim GST refunds meant for exporters.
Direct and indirect authorities have been scaling up use of technology and data analysis to identify businesses with poor compliance track record. With the sharp reduction in tax revenues this year, the trend is expected to gain further momentum. On Friday, the Income Tax Department searched 16 premises of a cattle feed producer including in Kanpur, Gorakhpur, Noida, Delhi and Ludhiana, the department said in a statement.
GST authorities are now trying to tighten the procedure for new GST registration. As per the plan before the GST Council, businesses whose owners or promoters do not have commensurate income tax payment records will require physical and financial verification before their companies can be given GST registration, Mint had reported last Sunday.
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