InvestorQ : Is it true that the GST space has been facing a lot of problems due to fake invoices?
diksha shah made post

Is it true that the GST space has been facing a lot of problems due to fake invoices?

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Mahima Roy answered.
6 months ago
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Fake invoicing in GST is not a recent problem and has been in existence for quite some time now. But now the Council is apprehensive that it is resulting in a real problem of loss of revenues as there is a lot of leakage happening.

In the GST system, a lot of fake invoicing is possible as two-stage verification and cross verification is still not fully happening due to partial digitization of a number of activities. That is why GST Council has raised some serious concerns over the rampant issue of fake invoices for claiming false GST credits by assessees.

As a result, the GST Council wants a two-phased verification done for all GST applications to reduce the chances of such misuse. For example, the first round can be an Aadhar based verification of the GST details, like in the case of individual assessees being done now.

However, in the absence of Aadhar mapping the verification can be done physically by the officer visiting the premises of the client. In an attempt to improve the GST collections, the GST Council has been working hard to plug the loopholes in the system.

Even in the past, fake invoices have been rampant and have led to a lot of revenue leakage. This time around the situation has become grave due to the stretched revenue situation and rising expenses. It is quite likely that tightening systems can help somewhat.


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