NEW DELHI: The Union Budget has proposed to impose penalties on taxpayers that control their balances through bogus entries and bogus invoicing to claim input tax credit under products and services tax (GST).
A brand new section — 271AAD — was suggested to be inserted into the Income Tax Act, to penalise individual maintaining books of accounts in the event of a false entry or omission of an entrance applicable for calculating total income.
“Such individual will be able to pay by means of penalty an amount equivalent to the aggregate number of these false and omitted entrances,” details from the Finance Bill show.
“Penalty will also be levied on another individual who causes the individual needed to keep books of account to create or causes to create any false entry or omit or cause to omit any entry in books of accounts,” that the Bill added. The change will take effect from April 1, 2020.
False entrances will include falsified or forged documents, fictitious statements, receipt of products or services without real supply or receipt of these invoices or goods using fake IDs.
The proposition was made to dissuade taxpayers to control their books and maintain wrong input in GST.