The Finance Ministry on Sunday showed that issuers and beneficiaries of fake GST invoices can be detained under the COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Activities Act). Presently, actions are being initiated under the GST law income tax law and money laundering act.

This warning has come at a time when 25 persons, including the son of an MLA, were arrested during the last four days as the result of a nationwide drive against fake invoices. Those arrested include two kingpins and two professionals in around 350 cases booked against 1,180 entities for issuance of fake invoices. The actual number of fake ITC involved is being ascertained. Search and investigations are on to identify and apprehend the other persons who were involved in the racket and also the beneficiaries who have used the fake invoices to evade GST, income tax, and for money laundering.

As per a statement of a senior Finance Ministry official, it says: “Considering the menace of the fake invoices and hawala racket and their damaging impact on the stability of the economy, it is also being examined whether, apart from taking action against the beneficiaries under GST laws, Income Tax Act, and Prevention of Money Laundering Act, issuers of fake invoices as well as beneficiaries of such invoices can be detained under COFEPOSA,”

COFEPOSA prescribes the detention of persons for a period up to two years, if he/she is allegedly involved in smuggling goods or abetting the smuggling of goods; or engaging in transporting or concealing or keeping smuggled goods or dealing in smuggled goods otherwise; or harboring persons engaged in smuggling goods or in abetting the smuggling of goods.

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