The Union Ministry of Finance is working to develop a mechanism to check fraudulent input tax credit (ITC) claims for goods and services tax (GST) paid under the reverse charge mechanism (RCM), according to a senior government official familiar with the matter.
“The Central Board of Indirect Taxes and Customs (CBIC) and the Goods and Services Tax Network (GSTN) are collaborating to create an ITC ledger for this purpose. The ledger is expected to be operational in November,” said the official.
Under the GST framework, certain businesses must pay tax through RCM, meaning the recipient of goods or
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