Tamil Nadu GST Circular: No Tax on Fake Invoices, But Penalties Apply for Fraudulent Claims Under Specific Sections.

The circular issued by the Tamil Nadu Commercial Taxes Department clarifies the applicability of demand and penalty provisions under the Tamil Nadu Goods and Services Tax Act, 2017 for transactions involving fake invoices. It addresses scenarios where registered persons issue invoices without actual supply of goods or services, enabling recipients to fraudulently claim input tax credit (ITC). The circular specifies that such activities do not constitute "supply" under the Act, thus no tax liability arises. However, penalties under specific sections are applicable for issuing fake invoices and fraudulent ITC claims. The circular emphasizes the need for case-specific actions based on the outlined principles.

---

---

---