Quick Summary
The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued more than 300 show-cause notices to promoters, directors, and senior management of various companies for allegedly wrongfully availing Input Tax Credit (ITC). The DGGI is also seeking to impose penalties as high as 100% of the tax amount in cases where fraudulent ITC claims have been identified. These notices, sent out in the first week of August for the financial years 2017-18 and 2018-19, are already being chal
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FAQ :
Promoters, directors, and senior management of various companies have received over 300 show-cause notices.
The alleged wrongdoing is the wrongful availment of Input Tax Credit (ITC).
Penalties as high as 100% of the tax amount can be imposed where fraudulent ITC claims are identified.
The notices relate to the financial years 2017-18 and 2018-19.
The show-cause notices were sent under Section 122(1A) of the Central GST Act, which allows penalties for direct participation in or facilitation of tax evasion or fraudulent invoices.
The industry is concerned about penalties being imposed on individuals in senior management, arguing it should be reserved for clear cases of fraudulent intent and that holding executives personally liable for ITC disputes can be unjust.
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