The GST clean-up may take years fake invoicing is one area the government is still struggling to cope with. The provision to take credit on GST paid by the assessee is exploited by some in the industry and trade. Fake invoicing ultimately results in loss of revenue for the government.
The worst part is the menace is growing and growing very fast. If the financial year 2018-19 saw 1,620 cases of fake invoicing detected, it has more than doubled to 3,866 cases in this fiscal FY20.
These details have been provided by the government itself to the Indian Parliament. In a reply to a question in the Rajya Sabha, the Minister of State for Finance, Anurag Singh Thakur has said, Delhi led the way with the highest number of cases and the GST evasion through fake invoicing in Delhi had been to the tune of Rs 3,957.90 crore, a huge sum, by any reckoning. One Delhi company, M/s. Haryana Excell Forging alone had raised fake invoices to the extent of Rs 241 crore.
Other states from where fake invoicing reports have come besides Delhi are Haryana, Rajasthan, Tamil Nadu and Gujarat.
With several months of economic slowdown and poor tax collections have already put the governments at the centre and the states into distress and this creates a lot of pressure on the enforcement agencies.
Experts observe that the menace of fake invoices could hurt the exchequer quite badly, especially when the government is going through a time of stress.