Page 26 - Banking Finance June 2022

ARTICLE

iv. Before discounting/ purchasing bills co-accepted by other Bank, Bank should To ensure that goods represented
obtain written confirmation of the concern controlling office of accepting by the bills are not over valued
Bank.
No accommodation bills should
v. Once the bill is co-accepted a non-fund liability entry needs to be recorded ever be co-accepted
in the books of the bank engaging the customers' liability for the transaction
Proper records of bills co-accepted
Co-acceptance must be maintained by the
branches and appropriate charges
Buyer’s Bank (Add Bank extending
are collected from the borrower
acceptance to Bills) Conveying acceptance Credit (Seller’s bank)
for bills co-accepted
Proper periodical returns of the
bills co-accepted are filed with
controlling authorities

Assessment:
While extending facility under co-
Appliant (Buyer) Underlying Transaction Benificiary (Seller)
acceptance, Banks ensure whether it is
meant for capital goods or to meet the
working capital. Same precaution as
Co-acceptance of Bills:
enumerated above are taken so that at
To ensure that co-acceptance facility is given to only those customers
any point of time there shall not be
enjoying other credit facilities with the Bank.
any double finance. Limit under co-
Only genuine trade bills should be co-accepted and it is to be ensured that acceptance is depending on extend of
the borrower has received the stock represented by the bills. bills co-accepted.

Over Rs. 50,000 cr of fake input tax credit claims detected in 18-
month special drive

The Centre, with support from States, has managed to detect fake Input Tax Credit (ITC) amounting to over Rs. 50,000
crore in a period of 18 months. However, the recovery has been much less and experts have called for more such
initiatives to check fake invoices.

Vivek Johri, Chairman of the Central Board of Indirect Taxes & Custom (CBIC), said the special drive, which commenced
in November 2020 along with States, has so far resulted in the booking of more than 6,700 cases and arrests of over
650 persons. More than 20,000 fake GSTNs have been unearthed and over Rs. 50,000 crore fake ITC detected.
“We have recovered over Rs. 2,400 crore through this drive and attempts are on to improve recovery,” he said while
talking to people from industries. As per Section 132 of the CGST Act, 2017, issuance of an invoice or bill without
supply of goods or services and wrongful availing or utilisation of ITC is a cognisable and non-bailable offence, if the
amount is over Rs. 5 crore.
Though experts acknowledge the success achieved so far, through the special drive, they suggest further initiatives.
MS Mani, Partner with Deloitte India, said several businesses that take input tax credits based on their vendors’
invoices have already put in place stringent tax processes to weed out suspicious vendors. This will need to become
a way of life for all businesses in order to end the menace of fake invoices. “In addition, there would be increased
scrutiny on invoices issued to related parties,” he said.

26 | 2022 | JUNE | BANKING FINANCE