Bogus purchase treatment for it act gst dealer

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Quick Summary

This discussion addresses how the Income Tax Act treats bogus purchases for GST-registered dealers. If a GST officer flags purchases as bogus due to issues like missing e-way bills, despite bank payments and valid invoices for received goods, it may not be considered a bogus purchase under the IT Act. Consequently, penalties under Section 271(1)(c), which can range from 100% to 300% of tax evaded for concealed income or inaccurate information, might not be applicable in such cases.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)
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26 November 2024 Sir,
Gst and it registered dealer bogus purchase some amount found by gst officer (evedience payment through on bank channel and e-waybill documents not supported)
Question:
Assessess Bogus purchase transaction treatment in it act.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 November 2024 Under Section 271(1)(c) of the IT Act, if the tax authorities find that a taxpayer has concealed income or provided inaccurate information in their return (e.g., through false purchases), they can levy a penalty.
The penalty could be 100% to 300% of the tax evaded, depending on the nature of the offense.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 November 2024 As per the data provided, if the discrepancy is only about e-way bill, while the payment is made through bank against valid invoice against received goods, it cannot be termed as bogus purchase under IT act. As such no penalty can be levied under the section.

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