Odisha to amend GST Act to make fraud in input tax credit non-bailable

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Faced with rising cases of fraud in input tax credit, the Naveen Patnaik government plans to amend the Odisha Goods and Services Tax making fraudulent input tax credit and retaining benefit as a cognizable and non-bailable offence.

The Cabinet which met on Tuesday decided to amend the Odisha Goods and Services Tax Act 2017 by bringing Odisha Goods and Services Tax(Amendment) Bill 2020 in its place so that people who do fraudulent GST transactions or passing and availing fraudulent input tax credit would be liable for penalty. The amendment would also make such offences cognizable and non-bailable.

The Cabinet also decided to insert a new section 168A in the Odisha GST Act to extend due dates for various compliances during war, epidemic, flood, drought, fire, cyclone and natural calamities.

The proposed amendment has come in the backdrop of a series of cases involving fraudulent input tax credit by dishonest businessmen of the state. In August, officials in Odisha had busted a racket of fake GST invoice involving Rs 712 crore and arrested a businessman for carrying out fake transaction. Businessman Kashmira Kumar Agrawal had hired middlemen who collected documents like PAN card, Aadhaar Card, photographs from people seeking gainful employment such as housewives, drivers, and plumbers from Sundargarh and Sambalpur districts in exchange for money. He, however, misused the documents and created fictitious and dummy firms in the name of these persons.

He had transferred huge amounts of money to different firms without having any business transactions with them.

In January this year, the state’s GST enforcement authorities arrested two persons for GST frauds worth Rs 212 crore through 28 fictitious and dummy firms in the name of daily wage labourers, private tutors, unemployed youths and housewives. In March, the enforcement officials of GST busted a major fraud in which fake invoices to the tune of Rs 294 were generated by 11 dealers in Bhubaneswar.

The GST frauds have been a major source of concern for Odisha has come at a time when its collection in the first five months of 2020-21 fiscal went down by 21 per cent compared to the corresponding period of last fiscal. The total collection till August-end was Rs 4362.95 crore as against Rs 5529.33 crore collected during the corresponding period of 2019-20 fiscal.

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