Quick Summary
The Union Ministry of Finance is advancing efforts to curb fraudulent Input Tax Credit (ITC) claims related to the Goods and Services Tax (GST) paid under the Reverse Charge Mechanism (RCM). A senior official has revealed that the Central Board of Indirect Taxes and Customs (CBIC) is collaborating with the Goods and Services Tax Network (GSTN) to develop an ITC ledger system to track and verify RCM-related transactions. This new ITC ledger, expected to launch by November, will target fraudulent
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FAQ :
The new ITC ledger system is designed to curb fraudulent Input Tax Credit (ITC) claims related to Goods and Services Tax (GST) paid under the Reverse Charge Mechanism (RCM).
The new ITC ledger system is expected to be launched by November.
The Central Board of Indirect Taxes and Customs (CBIC) is collaborating with the Goods and Services Tax Network (GSTN) to develop the system.
The system will target fraudulent practices where businesses claim ITC without properly paying GST under RCM or inflate their claims.
The Ministry of Finance aims to mitigate risks by leveraging advanced data analytics and artificial intelligence (AI) to identify suspicious patterns in tax credit claims.
In FY24, the detection of fraudulent ITC claims surged by 50% to over INR 36,000 crore.
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