9911796707
TMI BlogClarification on various issues relating to applicability of demand and penalty provisions under the West Bengal Goods and Services Tax Act, 2017 in respect of transactions involving fake invoicesX X X X Extracts X X X X X X X X Extracts X X X X ..... me to notice where the registered persons are found to be involved in issuing tax invoice, without actual supply of goods or services or both (hereinafter referred to as fake invoices ), in order to enable the recipients of such invoices to avail and utilize input tax credit (hereinafter referred to as ITC ) fraudulently. Representations are being received from the trade as well as the field formations seeking clarification on the issues relating to applicability of demand and penalty provisions under the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as WBGST Act ), in respect of such transactions involving fake invoices. In order to clarify these issues and to ensure uniformity in the implementation of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be taken against A in respect of the said transaction. The registered person A shall, however, be liable for penal action under section 122 (1)(ii) of the WBGST Act for issuing tax invoices without actual supply of goods or services or both. 2. A registered person A has issued tax invoice to another registered person B without any underlying supply of goods or services or both. B avails input tax credit on the basis of the said tax invoice. B further issues invoice along with underlying supply of goods or services or both to his buyers and utilizes ITC availed on the basis of the above mentioned invoices issued by A , for payment of his tax liability in respect of his said outward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, under the provisions of section 73 or section 74 or any other provisions of the WBGST Act. In this case, the input tax credit availed by B in his electronic credit ledger on the basis of tax invoice issued by A , without actual receipt of goods or services or both, has been utilized by B for passing on of input tax credit by issuing tax invoice to C without any underlying supply of goods or services or both. As there was no supply of goods or services or both by B to C in respect of the said transaction, no tax was required to be paid by B in respect of the same. The input tax credit availed by B in his electronic credit ledger on the basis of tax invoice issued by A , without actual receipt of goods or ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking/ utilizing input tax credit without actual receipt of goods and/or services. 2. The fundamental principles that have been delineated in the above scenarios may be adopted to decide the nature of demand and penal action to be taken against a person for such unscrupulous activity. Actual action to be taken against a person will depend upon the specific facts and circumstances of the case which may involve complex mixture of above scenarios or even may not be covered by any of the above scenarios. Any person who has retained the benefit of transactions specified under sub-section (1A) of section 122 of WBGST Act, and at whose instance such transactions are conducted, shall also be liable for penal action under the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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