Subject: Clarification on various issues relating to applicability of demand and penalty provisions under the Goa Goods and Services Tax Act, 2017 in respect of transactions involving fake invoices-Reg.
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 Goa Goods and Services Tax Act, 2017 (hereinafter referred to as "Goa GST Act"), in respect of such transactions involving fake invoices. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the undersigned, in exercise of its powers conferred by Section 168 of the Goa GST Act, hereby clarifies the issues detailed hereunder.
1.
The registered person 'A' shall, however, be liable for penal action under Section 122 (1)(ii) of the Goa GST Act for issuing tax invoices without actual supply of goods or services or both.
2.
3.
However, in such cases, 'B' shall be liable for penal action both under Section 122(1)(ii) and Section 122(1)(vii) of the Goa GST Act, for issuing invoices without any actual supply of goods and/or services as also for taking/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 Goa GST Act, and at whose instance such transactions are conducted, shall also be liable for penal action under the provisions 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 Goa GST Act may also be invokable, subject to conditions specified therein, based on facts and circumstances of each case.
3. Difficulties, if any, in implementation of these instructions may be informed to the undersigned.
Ruchika Katyal, IAS,
Commissioner of State Taxes, Goa.
Note: Similar circular is issued under Central Goods and Services Tax Act, 2017 by the GST Policy wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, GOI, New Delhi vide Circular No. 171/03/2022-GST dated 06th July, 2022.