2022-GST Made Easy – Fake Invoicing

To Clarify the issues and to ensure uniformity in the implementation of the provisions of law across the field formations, board on Wednesday issued Circular No. 171/03/2022-GST dated 6th July 2022.

The circular has been explained below in tabular form by taking example of Mr. A, B & C being registered GST dealers.

S. No.	Supply of Goods and/or Services made or not	ITC Availed by recipient	ITC Utilized by recipient	ITC allowable or not	Tax on outward supply to be recovered	Penalty & Section	Section	Remarks	Individual Liability
1.	Not Made by A	Not Availed	Not Utilized	Not Allowed	No tax to be recovered from A	On Mr. A: 20,000 or Tax (higher)	122(1)(ii)	No recovery of tax & penalty u/s 73 & 74.	Mr. A – 20,000 or Tax (higher) u/s 122(1)(ii)

2.	Not Made by A but made by B	Availed	Utilized	Not Allowed	No tax to be recovered from A	On Mr. B: Penalty of 15% or 25% or 50% of tax {CGST & SGST} (depending on time of payment of tax)	Section 74 Interest u/s 50	No action in other section as per section 75(12)	Mr. A 20,000 or Tax Evaded (whichever is higher) u/s 122(1)(ii)
									Mr. B 15% or 25% or 50% of tax as the case may be u/s 74 Along with Interest u/s 50

3.	Not Made by A & B	Availed	Utilized	Not Allowed	No tax to be recovered from A or B	On Mr. B: 10,000 or Tax (higher)	122(1)(ii) – Outward Supply & ITC on Inward Supply 122(1)(vii)	No demand and recovery of either ITC or outward tax liability & No recovery of tax & penalty u/s 73 & 74.	Mr. A 20,000 or Tax Evaded (whichever is higher) u/s 122(1)(ii)
									Mr. B 20,000 or Tax Evaded (whichever is higher) u/s 122(1)(ii) & 20,000 or Tax Evaded (whichever is higher) u/s 122(1)(vii)
									Mr. C 15% or 25% or 50% of tax as the case may be u/s 74 Along with Interest u/s 50