How to Identify/Find the Fake GST Bill in India

How to Identify Fake GST Invoices?

The following are the points that should be considered to identify a fake GST invoice:

1. Valid GSTIN: Visit the GST portal to authenticate the GST number. Here are the details that will be displayed if the GSTIN is valid:

1. Type of taxpayer

1. Registration date
2. Registration location (State)
3. Legal name and the trade name of business
4. UIN or GSTIN status

In case the GSTIN is invalid, then the above details will not be displayed on screen.

1. Presence of GSTIN: GSTIN is a unique identification number that is provided to all the GST registered sellers. According to the GST rules, valid GSTIN should be present in the e-invoice. 
2. Updated GST rates: Check the GST rates on the official website to cross check the rates mentioned in the invoice. In case of any mismatch, taxpayers can contact the professional practitioner to determine the rate or find the GST-exempted items.
3. Registered supplier: Suppliers registered under Goods and Services Tax are only eligible to issue GST invoice. Here are the criteria for eligibility of issuing GST invoice: 

1. Taxable person
2. E-commerce operators

1. Aggregate turnover over Rs.20 lakh
2. Taxable person who is a non-resident
3. Interstate supplier

Search by PAN 

1. Click on the link https://www.gst.gov.in/. 
2. Under ‘Search Taxpayer’, click on ‘Search by PAN’. 
3. Enter the PAN number of the person and click on ‘Search’. You will find whether the person has actually paid the GST or not. 

Note: Turnover over Rs.40 lakh and Rs.10 lakh for notified and special category state, respectively.

How are Fake Invoices Utilised by the Frauds?

The following are the ways of utilising fake invoices:

1. Issuing invoices without supplying goods or services
2. Issuer issues fake invoices showing payment done by non-existent ITC resulting in loss of Government revenue
3. Transferring ITC from one company to another to increase the turnover without supplying goods, which gets tracked under the provisions of Rule 16 of the CGST Act, 2017.
4. Difference in the goods and services mentioned in the invoice and the one received. In such cases, ITC may be utilised and the issuer may claim a GST refund. 

Implications of Issuing Fake GST Invoice

The following are the implications of issuing fake GST invoice if an individual is found guilty after an investigation of fake GST invoices:

1. Entities charged with fake GST invoices will be flagged in an offence database. Automatic alerts will be given to GST Application to investigate after the identification of purchasers issued with fake invoices.
2. Input tax credit availed by the entities should be identified by investigating their past transactions with other entities, and recovery steps should be taken as per the provisions mentioned under the law.
3. Section 89 of the CGST Act 2017 will be evoked if any criminal involvement of directors in evading GST is found in the prima-facie evidence.

1. Provisional attachment to property including bank accounts should be invoked as mentioned in the provisions under Section 83 of the CGST Act, 2017.
2. Cancellation of GST registration and re-registration for suppliers issuing fake GST invoice and physical verification will be done for registration in some cases.
3. Input Tax Credit will be blocked for entities so that they cannot escape the undue ITC.

Circular 171 on Fake Invoices

The following is the list of ITC (Input Tax Credit) availed or utilised by the taxpayer and the corresponding penalty provision against fake invoices: