NEW DELHI: The Union Budget has proposed to levy penalties on taxpayers who manipulate their accounts via false entries and fake invoicing to claim input tax credit fraudulently under goods and services tax (GST).
A new section – 271AAD – has been proposed to be inserted in the Income Tax Act, to penalise person maintaining books of account in case of a false entry or omission of an entry relevant for computing total income.
“Such person shall be liable to pay by way of penalty a sum equal to the aggregate amount of such false and omitted entries,” details in the Finance Bill reveal.
“Penalty shall also be levied on any other person who causes the person required to maintain books of account to make or causes to make any false entry or omit or cause to omit any entry in books of account,” the Bill added. The amendment will take effect from April 1, 2020.
False entries will include forged or falsified documents, false invoices, receipt of goods or services without actual supply or receipt of such goods or invoices using fake IDs.
The proposal has been made to discourage taxpayers to manipulate their books and claim wrong input credit in GST.
Source: economictimes.indiatimes.com