ComplaintAdda
Fact CheckedLast Updated: 21 July 2026Reviewed By: ComplaintAdda Indirect Tax & GST Law Desk

GST Fraud, Fake Bill & Non-Issuance of Tax Invoice Legal Redressal Guide

The Goods and Services Tax (GST) is India's unified indirect taxation system established under **The Central Goods and Services Tax (CGST) Act, 2017**, **State GST (SGST) Acts**, and **The Integrated GST (IGST) Act, 2017**, administered by the **Central Board of Indirect Taxes and Customs (CBIC)** and State Tax Authorities. Every registered business with an aggregate turnover exceeding statutory thresholds MUST issue a valid 15-digit GSTIN tax invoice for taxable goods and services. However, consumers and small businesses routinely encounter fraudulent practices: (1) **Unregistered Tax Collection**: Shopkeepers, restaurants, or local vendors charging 5%, 12%, or 18% GST on total bills without displaying a valid 15-digit GSTIN on the invoice. (2) **Fake Invoice & Misappropriation**: Issuing fake or handwritten tax invoices, pocketing the tax money collected from consumers, and failing to remit it into the government treasury within statutory deadlines. (3) **Refusal to Issue Tax Invoice**: Retail traders demanding cash payments and refusing to issue official GST bills to evade tax. (4) **Anti-Profiteering Violations (Section 171 CGST Act)**: Suppliers failing to pass on the benefit of GST rate reductions or Input Tax Credit (ITC) to consumers through commensurate price cuts. Citizens hold statutory rights: **Section 31 & 32 CGST Act** strictly prohibits unregistered persons from collecting GST; **Section 122 & 132** empowers tax authorities to arrest, prosecute, and impose 100% penal fines on offenders; and **Section 171** empowers consumers to recover excess money charged along with 18% annual interest.

Expert Advisory Note & Regulatory Nuance

Under Section 31, 32, 122 & 171 of CGST Act 2017, collecting GST without an active 15-digit GSTIN or overcharging tax beyond MRP is illegal. Violators face 100% tax penalties, anti-profiteering recovery, and prosecution under Section 132.

What Is It

GST Fraud & Anti-Profiteering Redressal covers non-issuance of bills, fake GSTIN usage, tax evasion, and failure to reduce retail prices post GST rate cuts. Key statutory mechanisms include: (1) Section 31 & 32 CGST Act (Tax Invoice Mandate): Mandatory issuance of tax invoice containing 15-digit GSTIN, serial number, HSN/SAC code, and breakdown of CGST/SGST/IGST. Non-registered entities collecting tax face severe criminal penalties. (2) Section 171 CGST Act (Anti-Profiteering Law): Statutory duty on suppliers to reduce prices whenever GST rates are lowered or ITC is increased. Standing Committees on Anti-Profiteering investigate complaints referred to DGAP and CCI. (3) CBIC Anti-Evasion Portal & Toll-Free Helpline 1800 1200 232: Direct reporting channel for tax fraud. Informers providing verifiable leads on tax evasion receive statutory monetary rewards. (4) Consumer Protection Act 2019 & e-Daakhil: Charging GST above Maximum Retail Price (MRP) or overcharging tax constitutes Unfair Trade Practice entitling consumers to compensation and punitive damages in Consumer Courts.

When To Use It

Use this legal guide immediately if a merchant charges GST without a valid GSTIN on the bill, refuses to provide a tax invoice upon request, charges GST over and above the printed MRP, issues a bill with an inactive or canceled GSTIN, or fails to lower product prices despite GST rate cuts by the government.

Step-by-Step Process

  1. 1Step 1: Verify GSTIN Authenticity on Official CBIC / GST Portal (services.gst.gov.in). Go to the official GST Portal > Search Taxpayer > Search by GSTIN/UIN. Enter the 15-digit GSTIN printed on your bill. Verify whether the legal trade name matches the store, and check if the Registration Status is 'Active'. If marked 'Cancelled', 'Inactive', or 'Not Found', it is a fraudulent bill.
  2. 2Step 2: File Complaint on CBIC Self-Service Grievance Portal (selfservice.gstsystem.in) or Call 1800 1200 232. Log into the CBIC Self-Service portal, select 'Report Tax Evasion / Fake Invoice', upload a photo/PDF of the fraudulent bill, enter merchant address, and submit to generate a Grievance Ticket Number.
  3. 3Step 3: Submit Complaint to State Anti-Evasion Wing & Commissioner of Commercial Taxes. For serious GST fraud or unremitted tax collection > ₹1 Lakh, write a formal complaint addressed to the Joint Commissioner (Anti-Evasion / Special Investigation Branch SIB) of your State GST Department attaching original invoices, payment proofs, and GSTIN verification screenshots.
  4. 4Step 4: File Anti-Profiteering Complaint with Standing Committee (Section 171 CGST Act). If a company fails to reduce prices after a GST rate cut, download Form APAF-1 from the Directorate General of Anti-Profiteering website, fill in pre-cut and post-cut purchase invoices, and submit to the State Level Screening Committee on Anti-Profiteering for DGAP investigation.
  5. 5Step 5: Lodge Consumer Court Complaint on e-Daakhil (edaakhil.nic.in) for Overcharging MRP / Fraud. If a retailer charges GST on MRP-inclusive goods or refuses a tax invoice, file a consumer suit under Unfair Trade Practice on e-Daakhil seeking 100% refund of excess tax plus punitive damages for consumer harassment.

Documents Required

  • Original Retail Purchase Bill / Invoice / Cash Memo showing itemized price, tax rate, and printed GSTIN
  • Screenshot of GSTIN Verification Result from official GST Portal (services.gst.gov.in) showing taxpayer status
  • Proof of Digital Payment (UPI transaction screenshot, Credit Card statement, or NetBanking receipt matching merchant name)
  • Photo of Product Packaging clearly displaying the Maximum Retail Price (MRP) inclusive of all taxes
  • Form APAF-1 (for Anti-Profiteering complaints comparing pre-reduction and post-reduction price tags)
  • Copy of written communication / email sent to merchant requesting valid tax invoice

Fees

100% Free. Searching GSTIN authenticity on services.gst.gov.in, filing tax evasion complaints on CBIC Self-Service Portal (selfservice.gstsystem.in), calling 1800 1200 232, and submitting Anti-Profiteering Form APAF-1 involves ZERO fees. Informers reporting major GST fraud are eligible for monetary rewards under CBIC Reward Schemes.

Processing Time

CBIC Helpdesk (1800 1200 232) handles calls instantly. Self-Service Portal tickets are assigned to Nodal Officers within 3 to 7 days. Anti-Evasion raids and Section 122/132 proceedings take 30 to 90 days. Anti-Profiteering investigations by DGAP/CCI are completed within 3 to 6 months.

Important Tips

  • Always Verify 15-Digit GSTIN Structure: The first 2 digits represent the State Code (e.g., 07 for Delhi, 27 for Maharashtra), next 10 characters match the PAN of the business, 13th is entity number, 14th is 'Z', and 15th is checksum. If format is invalid, the bill is fake.
  • Never Pay GST on MRP Goods: Maximum Retail Price (MRP) printed on packaged commodities is legally INCLUSIVE of all taxes. Adding GST over and above MRP is illegal under Consumer Goods (Packaged Commodities) Rules.
  • Check Active Status on services.gst.gov.in: Suspended or canceled GSTIN holders CANNOT collect tax. If status is 'Cancelled' or 'Suspended', take a screenshot and attach it to your CBIC fraud ticket.
  • Claim Monetary Rewards for Reporting Tax Fraud: Under CBIC Guidelines for Rewards to Informers, individuals providing verifiable information on GST evasion can receive rewards up to 20% of the recovered tax amount.

Frequently Asked Questions

NO. Under Section 31 and 32 of the CGST Act 2017, only registered taxable persons possessing an active 15-digit GSTIN can collect GST. Collecting tax without displaying a valid GSTIN on the invoice is a punishable tax fraud under Section 122 carrying 100% penalty of the tax amount.
NO. Under the Legal Metrology (Packaged Commodities) Rules and landmark Consumer Court rulings, MRP is inclusive of all taxes. Adding GST over and above the MRP constitutes an Unfair Trade Practice. Consumers can file a complaint on National Consumer Helpline (1915) or e-Daakhil portal for full refund and damages.
Visit services.gst.gov.in > Search Taxpayer > Search by GSTIN/UIN. Enter the 15-digit code. Check if the Business Trade Name matches the shop and if Status is 'Active'. If status is 'Cancelled' or 'Suspended', the merchant is illegally collecting tax.
Under Section 132 of CGST Act 2017, issuing invoices without supply of goods or collecting tax and failing to deposit it beyond 3 months is a cognizable and non-bailable offence carrying imprisonment up to 5 years and heavy fines if tax amount exceeds ₹5 Crores.
Section 171 mandates that any reduction in GST tax rates or increase in Input Tax Credit (ITC) must be passed on to the end consumer by way of a commensurate reduction in product prices. Failing to reduce retail prices attracts investigation by DGAP and Competition Commission of India.
Lodge a complaint on CBIC Self-Service Portal (selfservice.gstsystem.in) or call 1800 1200 232. Provide merchant name, location address, and payment proof. You can also send a written complaint to the State GST Anti-Evasion Wing (SIB).
YES. Under the CBIC Informer Reward Guidelines, individuals who provide specific, actionable information leading to detection of GST evasion or fake invoicing are eligible for monetary rewards up to 20% of the total tax and penalty recovered.
Under Section 122(1)(iii) of CGST Act, any person who collects GST in contravention of the Act (including under a canceled GSTIN) is liable to a penalty equal to ₹10,000 or 100% of the tax collected, whichever is higher, in addition to prosecution under Section 132.
This article is for general information only and does not constitute legal advice. Always verify with the official source before acting.