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TMI BlogClarification on various issues relating to applicability of demand and penalty provisions under the Andhra Pradesh 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 ..... ssioner (GST) Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing. A number of cases have come 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 Andhra Pradesh Goods and Services Tax Act, 2017 (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Besides, no penal action under the provisions of section 73 or section 74 is 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 APGST 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 73 or section 74 or any other provisions of the APGST 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 services or both, is ineligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the said sub-section. It may also be noted that in such cases of wrongful/fraudulent availment or utilization of input tax credit, or in cases of issuance of invoices without supply of goods or services or both, leading to wrongful availment or utilization of input tax credit or refund of tax, provisions of section 132 of the APGST Act may also be invokable, subject to conditions specified therein, based on facts and circumstances of each case.
3. It is requested that suitable trade notices may be issued to publicize the contents of this circular.
4. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Chief Commissioner.
Chief Commissioner. X X X X Extracts X X X X X X X X Extracts X X X X
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