Fake Billing Scam What Happened in Lakhipur?
A recent fake billing scam has shaken Assam’s business community. The GST Intelligence team arrested a Lakhipur-based businessman for creating bogus invoices worth ₹25 crore to illegally claim Input Tax Credit (ITC).
Fake billing scams drain government revenue and expose genuine businesses to scrutiny. Here’s what you need to know to protect your business.
How Does a Fake Billing Scam Work?
Under GST, registered dealers can claim ITC based on tax paid on purchases. In fake billing scams:
- Fraudsters issue invoices without actual movement of goods or services
- Buyer uses these invoices to claim bogus ITC
- Government loses revenue
- Genuine taxpayers face more audits and compliance burdens
In the Lakhipur case, the accused operated multiple fake firms, generated invoices for non-existent transactions, and passed on illegal ITC to other businesses.
Legal Action and Penalty
The Central GST Act, 2017 treats fake billing as a serious offence.
Key points:
- Offence under Section 132 – Punishable with imprisonment up to 5 years plus fine.
- GST officers can arrest suspects without a warrant (CBIC Circular No. 122/41/2019-GST).
- Assets can be attached under Section 83 for recovery.
👉 Read official CBIC guidelines on arrests and bail
Expert Tip: How to Stay Safe
🔑 “Always verify your suppliers’ GSTIN status on the GST portal and match invoices with GSTR-2B to avoid unknowingly claiming fake ITC.” — Efiletax Compliance Desk
Red Flags to Spot a Fake Billing Scam
Watch out for:
✅ Suppliers with no physical office
✅ Multiple firms with same address
✅ Sudden huge transactions
✅ No e-way bills for goods movement
✅ Frequent amendments in invoices
Report suspicious activities immediately to your jurisdictional GST officer.
Impact on Genuine Taxpayers
- More audits and scrutiny
- Risk of ITC reversal
- Business reputation damage
- Higher compliance costs
Ensure all invoices match actual goods/services and reconcile regularly.
Quick Summary for Google Snippet
Fake billing scam alert! GST Dept arrested a Lakhipur trader for issuing ₹25 crore bogus invoices to claim fake ITC. Learn how fake billing scams work, legal consequences, and tips to protect your business.
FAQs on Fake Billing Scam
1️⃣ What is fake billing under GST?
Issuing an invoice without supplying goods/services to wrongfully claim Input Tax Credit.
2️⃣ Is fake billing a bailable offence?
No. It’s a cognisable and non-bailable offence under Section 132 of CGST Act.
3️⃣ How can I check if a supplier is genuine?
Verify their GSTIN on the official GST portal.
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