NEW DELHI: The Delhi government has cancelled the GST registration of 1,282 traders who were found to be involved in the issuance of fake invoices. In addition, “show cause notices for cancellation have been issued to 3,221 dealers, of which proceedings are still underway,” a government statement said on Wednesday.
The department has directed its tax officers to recover the entire amount of tax, interest and penalty from such dealers as well as to take other legal action against them.
Following directions from Deputy Chief Minister and Finance Minister Manish Sisodia, the Department of Trade and Taxes has identified around 56,000 suspicious and risky dealers on various risk parameters.
Sisodia reviewed the situation twice in the last one month and ordered strict action against them. The Department, through GST inspectors, has conducted field verification and inspection of 16,141 suspicious dealers so far. Of them, 4,618 dealers were found to be non-existent and bogus.
“These dealers are non-existing/bogus dealers who got registration in GST to defraud the government exchequer by issue and use of fake invoices. A large number of GST fraud cases involving the use of fake invoices for wrong availment of input credit, which is further used to pay GST on outwards supplies has been detected,” read the statement.
“The purpose of use of such fake invoices is the fraudulent availment/encashment of input tax credit. The bogus entitles engaged in this activity also defraud other authorities such as banks by deflating turnovers, laundering of money etc.,” it stated.
The unscrupulous and bogus entitles engaged in such activities do not undertake actual trading of goods or services but involve in only paper transactions without physical delivery of goods and services, the government noted. After their identification, assistant commissioners and GST officers from the department are taking action against the dealers in accordance with the provisions of GST Act and Rules.