- Show Cause Notices and orders have been issued by the department in matters of fake invoicing under the GST regime.
- Circular No. 171/03/2022-GST dated 06.07.2022 clarifies that no demand and recovery can be made against a person who issues invoices without actual supply of goods and/or services under sections 73/74 of the CGST Act, but he shall be liable for penal action under section 122(1) of the Act.
- However, section 122 of the Act is a substantive section providing for levy of penalties, whereas sections like 73 and 74 are proceedings sections providing for the procedure and manner of imposition.
- Hence, SCNs and orders against issuers of fake invoices must be passed under the appropriate imposition-proceedings provision only, i.e. section 127.
Source Taxscan
