DGGI To Soon Issue Tax Notices To Companies Using Metal Scrap

New Delhi
The Goods and Services Tax intelligence wing is soon going to issue show cause notices to companies using metal scrap and agricultural inputs to claim fake input tax credit, sources said.
So many fake invoicing cases have been detected wherein metal scrap, agricultural items are used for industrial use. Show cause notices will be sent soon as investigation is in process of completion. Fake ITC is getting seeded in such cases which has been identified using data analytics. By supply chain analysis, we have caught hold of the companies utilising fake ITC, a senior government official told Moneycontrol. Metal scrap and agricultural inputs are fake invoicing prone sectors on which there is no GST, as scrap gets generated because of wear and tear.
When it comes to industrial use, there is a tendency to seek fake ITC to reduce liability for payment in cash. For agricultural items like cotton, traders discharge full liability in cash and claim fake ITC. Wherever there is no GST paid in the initial stage like agricultural produce, there is more tendency of fake claims, he said. The Directorate General of GST Intelligence will also initiate fresh investigations of more companies in these sectors, the official added.