DGGI Issues Over 300 Show-Cause Notices To Top Executives For Wrongfully Availing Input Tax Credits

The Directorate General of Goods and Services Tax Intelligence (DGGI) has slapped over 300 show-cause notices to promoters, directors and top management of industries, businesses, corporates and MNCs for wrongfully availing input tax credits (ITC) seeking to impose 100% penalties .

The show-cause notices targets top leaders of the companies including Managing Directors, CEOs, CFOs and Partners where the role of management in wrongfully availing ITC was clearly established.

“Notices were sent out only in cases where the investigation pointed at the role of promoters or senior management,” confirmed senior tax officials.

According to GST officials, the notices were sent under Section 122(1A) of Central GST ACT introduced in 2020 against those who facilitate tax evasion or engage in malpractices by directly participating and assisting in the issuance of invoices without actual supply of goods or services would face penalty equal to the amount of tax evaded or Input Tax Credit.

The DGGI officials imposed a penalty of Rs 102 crore equal to the evasion amount by the company, on the managing director of a prominent company shocking corporate India on the harsh action on an individual working for the company.

The tax authorities want to serve a strong deterrent on wilful defaulters with imposition of penalties equal to the amount of tax evaded qnd wrongful ITC available.