27.12.2021: The intelligence officers of the Directorate General of GST Ahmedabad, have seized more than Rs. 177 crores of Cash from Kanpur. Besides this 64 kg gold and 600 kg sandalwood oil worth Rs 6 crore is also seized. This is the ever biggest Cash seizure by CBIC officials until now.

The search operations were carried out in factory premises of fragrance manufacturers in Kanpur, of Shikhar brand Pan Masala and Tobacco products and the office/godowns of one Transporter in Kanpur, involved in the transportation of goods.

The information indicated a secret supply of goods by the manufacturer without payment of applicable tax. Similarly, the transporter used to generate multiple invoices in the name of non-existent firms, all below Rs 50,000/- for one full truckload, to avoid the generation of E-way Bills while transporting the goods. Also, the transporter was collecting the payments against such secret supplies in cash and handing it over to the manufacturer, after deducting his commission.

The GST officers initially were able to successfully intercept and seize 4 such trucks outside the factory premises. These trucks were cleared from the factory without invoices and E-way Bills, which confirmed the contents of intelligence.

During the physical stock checking, a shortage of raw materials and finished products were noticed in the factory premises. It is admitted by the authorized signatory of the company that the goods were cleared without payment of GST.

The tax officials found more than 200 fake invoices on the premises of the transporter. Later, The transporter did admit that goods were being transported without e-way bills under the cover of fake invoices. Also, the payments of such sales are collected in cash and handed over to the manufacturer. Thus, an amount of Rs 1.01 crores in cash has been seized from the possession of the transporter.

Earlier, on the basis of intelligence inputs, the residential premises of partners were searched. During the search, operation huge amount of cash, wrapped in paper, has been found. Thus, the total amount of cash is expected to be in excess of Rs 150 crores. Also, the said cash can be seized under the provisions of section 67 of the CGST Act. Also, it is reported that an amount of Rs 3.09 crores has been recovered so far towards tax dues.

As of now the statement of the Partner of the company was interrogated by the DGGI officers. Also, his statement has been recorded on 25/26.12.2021 under section 70 of the Act. The partner has accepted that the cash recovered from the residential premises is related to the sale of goods without payment of GST.

Now the partner has been arrested on 26.12.2021 for a commission of offenses prescribed under section 132 of the CGST Act and has been produced before the Competent Court on 27.12.20221.

GST Officials Bust Network of 46 fake firms Worth Rs.82.23 Crore

10.02.2021: The Central Goods and Service Tax officials nab one person after busting a network of 46 fake companies. These companies were involved in fake input tax credit worth Rs 82.23 crore.

In the ongoing drive against fake billing operations, the officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi East, have unearthed a multi-layered network of fictitious firms being used by their operators to generate and pass on fake ITC.

Through the use of detailed data analytics, Delhi East GST officials were able to identify and unravel the network of 46 fake companies operating since 2017 and passed several beneficiaries through fake ITC.

The investigation revealed that the fake companies were controlled by Mr. Arvind Kumar and his associates. He was arrested on 17.01.2021 and is in judicial custody to date.

Mr. Arvind Kumar’s main colleague, Mr. Kamal Singh (alias “Kamal Solanki”) had been absconding for the last one month. However, through continuous efforts, the authorities were able to arrest Mr. Kamal Singh who confessed to being involved in a fake billing racket worth Rs 541.13 crore. Thus it involves fake ITC of Rs. 82.23 crore, which is expected to increase as the investigation progresses.

Mr. Kamal Singh was arrested under Section 69(1) of the CGST Act 2017 and was produced before the Duty Magistrate on 09.02.2012.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has arrested 21 persons in various cases including GST evasion, with the involvement of Rs. 3791.65 crores.

GST vigilance Raids in Aurangabad and Nashik

28.07.2020: Simultaneous searches were conducted on 24th/25th July, 2020 by the officers of DGGI, Aurangabad Regional Unit and Nashik Regional Unit on the premises of a Multinational Brewery located at Aurangabad and a prominent Molasses based Distillery located at Nashik.

During the searches, it was revealed that while the Molasses based Distillery was paying GST on a part of the clearances of Alcohols not fit for human consumption, the clearances of an extremely large quantity Alcohols not fit for human consumption were suppressed and such clearances were neither being reflected in the GSTR 3B returns filed by them nor was any GST being paid on such clearances. The scrutiny of the documents revealed that during the period from July 2017 to 24th July 2020, the Taxpayer had cleared 21.09 Lakh Litres of Alcohols not fit for human consumption valued at app. Rs. 11.59 Crore/- without payment of GST of Rs. 2.09 Crore/-.

The searches also revealed that the Multinational Brewery was suppressing the clearances of Draff/Spent Wort which arises in the pre- fermentation stage during the process of brewing of barley for the manufacture of Beers. Draft/Spent Wort is completely different from ‘Dried Distillers Grain with Solubles (DDGS)’ or ‘Wet Distillers Grain with Solubles (WDGS)’ in as much as the former arises in the pre-fermentation stage of the brewing process while the latter arises in the post fermentation stage of the distillation process. The scrutiny of the documents revealed that during the period from July 2017 to June 2020, the Taxpayer had cleared 12638115 Kg of Draff/Spent Wortwithout payment of GST of Rs. 71,08,940/

An ancillary aspect of evasion was also detected during the investigations that the Taxpayers had not properly reversed the Input tax Credit availed on the goods and services which had been used by them for the manufacture of Alcohols fit for human consumption on which no GST is leviable. The total amount liable to be paid by the Taxpayers on this ground is expected to be Rs. 1.16 Crore approximately.

The Taxpayers have paid Rs. 65.17 lakhs on the spot. A substantial part of the outstanding GST liability is expected to be deposited by them after arrangement of funds in the coming days. If the time schedule for payment is not adhered to, action for attachment of properties may be initiated by the Department to safeguard the Revenue.

600 Crore Scam: GST Intelligence Books 3 Firms

27.07.2020:The Directorate General of GST Intelligence (DGGI) books case against M/s. Fortune Graphics Limited, M/s. Reema Polychem Pvt. Ltd. & M/s. Ganpati Enterprises. These firms are found involved in issuance of GST invoices without any actual supply of goods.

Therefore, the case was detected and developed by the officers on further data analytics out of a case booked against one of the exporters, M/s Anannya Exim. It was covered in the all India joint operation launched by DGGI-DRI in September 2019, against various exporters for fraudulently claiming IGST refund on the strength of ineligible ITC.

Further, during the investigations conducted by the DGGI Hqrs, it has emerged that the aforesaid three Companies namely M/s. Reema Polychem Pvt. Ltd., M/s. Fortune Graphics Limited and M/s. Ganpati Enterprises have issued invoices worth more than Rs. 4,100 Crore wherein tax amount of more than Rs. 600 Crore has been fraudulently passed on as ITC credit to different entities.

In this regard, three persons have been arrested for committing offences under GST Act. Two of them, who were on the run and were continuously avoiding presence in DGGI Headquarters, are directors/proprietor of M/s Fortune Graphics Limited, M/s Reema Polychem Pvt Ltd and M/s Ganpati Enterprises. The third person is the director of M/s AB Players Exports Pvt Ltd and controller of various other export firms/ companies who has claimed IGST refunds on the strength of fake invoices issued by these firms.

All the three persons have been arrested by DGGI (Hqrs.) for committing offences under the provisions of Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 and remanded for judicial custody by the Magistrate

Rs 281 Crores ITC scam busted by CGST Meerut

23.03.2020: In another investigation led by the CGST Meerut team revealed the issuance of fake GST invoices of Rs. 1,708 crores. This was a chain of fake companies operating from Delhi, Moradabad, and Meerut, involving fraudulent ITC of about Rs 281 crores.

On the basis of the initiative taken by the Chief Commissioner, Meerut, the Data Analytics team analyzed suspected firms. Further, they passed on information on the basis of which CGST Meerut unearthed a case of issuance of fake GST invoices without actual supply of goods and passing on the said fraudulent ITC to the other existing firms after circulation of invoices through a chain of fake firms/ companies which are non- existing. Also, these firms/ companies were operating from a small Janta Flat in Rohini Sector-6, New Delhi.

Further, the modus operandi, inter alia, involved not only creating fake firms/ companies by misusing the IDs of different people. Also, these companies were involved in purchasing non-active companies from others and getting the names of directors changed and using these for fake GST billing purposes. Before passing the ITC to ultimate business buyers, ITC was rotated multiple times among the non-existing firms and companies to make it difficult to find the trail. Against these fake invoices, ITC was passed on to existing firms/ companies for further utilization in the payment of GST. The end recipients from these fake firms made payment through Bank which was subsequently withdrawn and returned back to those end recipients in cash after deduction of certain commission. On preliminary scrutiny, it appeared that the accused namely Shri Pradeep Kumar (kingpin) and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad had taken multiple GST Registrations at the common address using a common email ID and mobile number.

During the search conducted at Meerut, Moradabad, and Delhi, incriminating records, cash of Rs. 9.56 lakhs, flex boards of several firms, rubber stamps of various firms/ companies, digital signature dongles, Credit / Debit Cards with different names, photographs, Bank checkbooks, PAN cards, etc. have been recovered & seized.

The offense committed by the accused Sh. Pradeep Kumar and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad is covered under Section 132(1)(b) & (c) of the CGST Act 2017, falling in the category of a cognizable and non-bailable offense under Section 132(5) and the same is punishable under Section 132(1)(i) of the said Act. Accordingly, the above 3 accused were arrested under Section 69 of the CGST Act, 2017 on 20.03.2020 and produced before the Economic Offences Court at Meerut. They have been sent to jail on judicial remand for 14 days on 21.03.2020 by order of the Special CJM, Meerut. Further investigations are underway.

GST Anti-Evasion Team sends two people behind the bars

19.03.2020: The GST Officers of Anti-Evasion team, Central GST Commissionerate, sends two people in judicial custody. The arrest was made towards availing the fraudulent Input Tax Credit on the basis of fake invoices and evasion of GST by utilizing the said fraudulent ITC of Rs. 24 crores approx. by M/s Shub Conductors LLP.

Further, It is known that among other firms, M/s Een Een Sales Corporation and M/s A.N. Marketing had passed on fake ITC to M/s Shub Conductors. Similarly, during the investigation, Shri Naresh Goel and Shri Anil Kumar Yadav, proprietors of M/s Een Een Sales Corporation and M/s A.N. Marketing respectively, agreed to have passed on fraudulent ITC to M/s Shub Conductors LLP, among other parties, by raising fake invoices without actual supply of goods.

During the process of investigation, residential property and 6 vehicles owned by Shri Vishal Gupta and Smt. Divya Gupta along with the bank accounts of M/s Shub Conductors LLP were provisionally attached under Section 83 of the CGST Act, 2017.

Further, Shri Vishal Gupta, Partner in M/s Shub Conductors LLP committed an offence under the provisions of Section 132(1)(c) of the Central Goods & Services Tax Act (CGST), 2017, which is a cognizable and non-bailable offense, punishable under Section 132(5) of the CGST Act, 2017. Accordingly, Shri Vishal Gupta was arrested on 17.03.2020 under Section 69(1) of the CGST Act, 2017 and remanded to judicial custody by the Duty Metropolitan Magistrate (MM) till 31.03.2020.

How Delhi Commissionaire exposes another GST Fraud of Rs. 12 Crore?

08.03.2020:The CGST Delhi Commissionerate exposes another fake input tax credit of Rs. 12 crores from 30 fake firms. The accused person was arrested on 07.03.2020 under Section 69(1) of the CGST Act, 2017 and sent to judicial custody till 21.03.2020.

The accused person did create various fake firms in the name of his employees and made them, the operators of such fake firms. Also, fake e way bills were generated for issuing fake invoices with different vehicle numbers. Thus, the accused person was receiving fake invoices from these fake firms to avail the input tax credit. Further, the accused person was to make the payments to these operators from the bank. Thereafter, he used to get back the cash after deducting the commission up to 50% of the tax value invoices in these fake/goods-less invoices.

Similarly, the accused person was procuring the non-GST paid goods from the small unregistered suppliers/traders without making payment of tax to the government. Further, he used to pass on such fake Input tax credit to his end buyers. The investigation is still in progress.

Rs. 436 crore Fake Input Tax credit Racket busted

02.03.2020: The Anti-Evasion team of Central GST Delhi East Commissionerate burst a racket involving fake input tax credit worth Rs. 436 crores. It was informed that three persons were operating a total of 17 fake firms to procure invoices without actual supply of goods and availed as well as passed on ITC fraudulently. Out of that Rs. 11.55 crores were fraudulently claimed as refund under Inverted Duty Structure.

The accused persons are related to each other by marriage and have been avoiding investigation for the past month. During the investigation, it was revealed that the accused persons had conducted a major hawala operation in conjunction with certain bank employees. As stated above, these 17 companies exist only on paper and were created for the purpose of expressing fake invoices and passing them to ITC. Companies, recipients, and suppliers on both sides of the transaction were found to be non-existent.

Further, the three-person namely Mr. Asif Khan, Mr. Rajiv Chhatwal and Mr. Arjun Sharma have committed crimes under sections 122 (1) (b) and 122 (3) (C) of the CGST Act, Section 2, which are cognizable and non-bailable offenses. The provisions of section 122 () and the Act are punishable under section (i) of sub-section (2) of section 202 of ibid. They appear to have committed the crime in accordance with section 122 (1) (e) of the Act.

Accordingly, these persons were arrested at 01.03. 2020 under section (1) (C) of CGST Act 2017. They are remanded to judicial custody till 13.03.2020 by the Chief Metropolitan Magistrate in Patiala House Court.

CGST Surat Exposes Bogus GST Billing & ITC of Rs 40 Cr.

26.12.2019: The surat commissioner has unearthed a racket of fake invoicing, IGST refund and input tax credit of Rs. 40 crore. The three firms involved in this racket has fraudulently availed ITC of amounting Rs. 20 crore for payment of IGST on goods exported. Later, these firms claimed a refund on such exports. Read the full story from below press release.

CGST Surat has detected a racket of bogus billing to the tune of Rs 600 Cr involving a GST to the tune of Rs 40 Cr.

PFA details.@FinMinIndia
@cgstvdr @cbic_india @nsitharaman pic.twitter.com/p80fx9FwUz

— CGST_Surat (@CgstSurat) December 25, 2019

GST Intelligence exposed another fake Invoice Racket worth Rs. 136 crore

25.10.2019: The GST Intelligence of Gurugram Zonal Unit arrest Sh. Rajiv Gupta on 23.10.2019 in relation to fake invoice case. He is the partner of M/s RST Batteries, Mundka Delhi and Director of M/s RST Batteries Pvt. Ltd Bahadurgarh, Haryana.

The person found to be defrauding the government exchequer for revenue of Rs. 20 crores. It is known that the person was issuing fake GST invoices in the name of 52 bogus firms he opened.

The person is sent now for 14 days of judicial custody for further investigation. Till now, the Gurugam Zonal Unit has arrested 10 persons in similar cases and exposed fake invoices racke of more than Rs 1,500 crores. Thus, the total revenue involves in the above amount is Rs. 280 crores due to the government.

GST ITC fraud o f Rs. 5.70 Crores: CGST Commissionerate arrest 3 person for committing offense

25-07-2019: The CGST Commissionerate of Gurugram, Haryana arrests three persons viz, Sh. Anil Kumar, Dist.- Hisar, Haryana, Sh.Bhikaram, KhajuriKhas, Delhi-110094 and Sh. Kuldeep Sharma, Sonipat Haryana.

The investigating team found that, they created a bogus firm in the name of M/s Palak International, Gurugram, Haryana on the fake ID documents of a person namely Sh. Jitender. This is for the purpose of issuing many fake invoices without any movement of actual goods.

Thus, M/s Palak International, issued various invoices amounting Rs. 31 Crores(approx.) with a GST value of Rs. 5.70 Crores. Further, this company has passed this fake Input Tax Credit of Rs. 5.70 Crores to the various buyers. Later these buyers availed the fake ITC to discharge their GST liabilities against their outward supply.

Therefore, all three accused were produced before the Hon’ble Judicial Magistrate, 1^st Class, Gurgugram, Haryana. Later sent them to judicial custody of 14 days on 23.07.2019. 

Till now, the GST & Central Tax, Gurugram, Haryana has recovered an amount of Rs. 3 Crores (approximately) towards the evasion of GST.

5.06 Crore GST ITC Fraud: Intelligence arrest proprietor of M/s. Shree Balaji Enterprises

18-07-2019: The GST Intelligence of Gurugram has arrested the Proprietor of M/s. Shree Balaji Enterprises, A-43, SaraswatiVihar, North-West, Delhi-110034.

The above Firm had taken ITC fraudulently of more than Rs 5.06 crore which involves the value of Rs28.11 crore on the basis of invoices issued by fake firms.

Thus, later the said firm, utilized fraudulently taken ITC to discharge their GST liability against the outward supply, to defraud the Government Exchequer.

Furhter, Shri Ajit Jindal was arrested on 12.07.2019 under Section 69(1) of the CGST Act, 2017. Thus, was produced before the Chief Judicial Magistrate, Gurugram. The Chief Judicial Magistrate, Gurugram has sent Sh.Ajit Jindal to Judicial custody of 14 days. Similarly, the further investigations in the matter is in progress.

Fake Input Tax Credit Invoices – Measure and Arrest under GST

02-02-2018: Central Delhi Commissioner has arrested two businessmen based in Rohini on 01st August 2018.  This arrest took place because these businessmen issued fake invoices of input tax credit.

This is fake because these businessmen have only issued invoices and actual supply did not take place.

This has resulted in tax evasion of approximately Rs. 201 Crores.  It is said that these businessmen were involved in plastic granule industry business.

GST Search team could find various documentary evidence in this regard during its search operation.   The arrest of these businessmen is taken place as per section 69(1 ) of the CGST Act 2017.  Also, both of them were produced before the Honorable Metropolitan Magistrate, at Patiala house.  It has brought to notice that further investigations are going on and such cases are about to rise in nearby future.

Author  View:

Well, I believe it has become a very easy job for the government now to track such evasion of tax cases.  As per my opinion, GSTN can now easily trace the input tax credit evasion.  Let us see how this becomes possible.

Let us say M/s. ABC issued 5 invoices Worth Rs. 50 lakh which includes GST payment of Rs. 90 thousand in the name of M/s. Xyz.

On the other hand, Mr. XYZ will claim input tax credit (ITC) of Rs. 90 thousand to set off his liabilities.

Let us assume, During the return filing process, Mr. ABC will not declare his outward supplies. That means he will show less tax payment.    At the same time, Mr. XYZ will claim ITC of Rs. 90 Thousand on fake invoices.  Therefore indirectly GSTN can see an increase of ITC compare to output tax liability.

Since suppliers declare the HSN wise summary of outward supplies it’s very easy to know on which product the government gets more tax.  However, it would have been easier for GSTN to trace the ITC based on outward supplies if GSTR 2 (Details of inward supplies) would have uploaded by the receiver of the goods or services.  Therefore to avoid fake invoices every receiver check is input tax credit availed with that of outward supplies declared by the supplier.  This reconciliation can be done by downloading GSTR2A data from GST portal.  GSTR2 return contains the details of outward supplies uploaded by the supplier.

The receiver should periodically check GSTR 2A entries with his input tax credit entries.  If receiver notice he has availed ITC but he can’t see said entry in GSTR 2A then he should ask the supplier to upload it and pass the credit to the receiver.  If the supplier doesn’t do it then the receiver may ask refund of availed ITC and reverse the availed with interest.

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SavingPost updated.View PostAdd titleRs.177 crore Cash Seized From Kanpur :: Ever biggest Seizure

27.12.2021: The intelligence officers of the Directorate General of GST Ahmedabad, have seized more than Rs. 177 crores of Cash from Kanpur. Besides this 64 kg gold and 600 kg sandalwood oil worth Rs 6 crore is also seized. This is the ever biggest Cash seizure by CBIC officials until now.

The search operations were carried out in factory premises of fragrance manufacturers in Kanpur, of Shikhar brand Pan Masala and Tobacco products and the office/godowns of one Transporter in Kanpur, involved in the transportation of goods.

The information indicated a secret supply of goods by the manufacturer without payment of applicable tax. Similarly, the transporter used to generate multiple invoices in the name of non-existent firms, all below Rs 50,000/- for one full truckload, to avoid the generation of E-way Bills while transporting the goods. Also, the transporter was collecting the payments against such secret supplies in cash and handing it over to the manufacturer, after deducting his commission.

The GST officers initially were able to successfully intercept and seize 4 such trucks outside the factory premises. These trucks were cleared from the factory without invoices and E-way Bills, which confirmed the contents of intelligence.

During the physical stock checking, a shortage of raw materials and finished products were noticed in the factory premises. It is admitted by the authorized signatory of the company that the goods were cleared without payment of GST.

The tax officials found more than 200 fake invoices on the premises of the transporter. Later, The transporter did admit that goods were being transported without e-way bills under the cover of fake invoices. Also, the payments of such sales are collected in cash and handed over to the manufacturer. Thus, an amount of Rs 1.01 crores in cash has been seized from the possession of the transporter.

Earlier, on the basis of intelligence inputs, the residential premises of partners were searched. During the search, operation huge amount of cash, wrapped in paper, has been found. Thus, the total amount of cash is expected to be in excess of Rs 150 crores. Also, the said cash can be seized under the provisions of section 67 of the CGST Act. Also, it is reported that an amount of Rs 3.09 crores has been recovered so far towards tax dues.

As of now thestatement of the Partner of the company was interrogated by the DGGI officers. Also, his statement has been recorded on 25/26.12.2021 under section 70 of the Act. The partner has accepted that the cash recovered from the residential premises is related to the sale of goods without payment of GST.

Now the partner has been arrested on 26.12.2021 for a commission of offenses prescribed under section 132 of the CGST Act and has been produced before the Competent Court on 27.12.20221.

GST Officials Bust Network of 46 fake firms Worth Rs.82.23 Crore

10.02.2021: The Central Goods and Service Tax officials nab one person after busting a network of 46 fake companies. These companies were involved in fake input tax credit worth Rs 82.23 crore.

In the ongoing drive against fake billing operations, the officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi East, have unearthed a multi-layered network of fictitious firms being used by their operators to generate and pass on fake ITC.

Through the use of detailed data analytics, Delhi East GST officials were able to identify and unravel the network of 46 fake companies operating since 2017 and passed several beneficiaries through fake ITC.

The investigation revealed that the fake companies were controlled by Mr. Arvind Kumar and his associates. He was arrested on 17.01.2021 and is in judicial custody to date.

Mr. Arvind Kumar’s main colleague, Mr. Kamal Singh (alias “Kamal Solanki”) had been absconding for the last one month. However, through continuous efforts, the authorities were able to arrest Mr. Kamal Singh who confessed to being involved in a fake billing racket worth Rs 541.13 crore. Thus it involves fake ITC of Rs. 82.23 crore, which is expected to increase as the investigation progresses.<script async=”” src=”https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js”></script> <!– link ad horizontal (blue text/white background) –> <ins class=”adsbygoogle” style=”display:block” data-ad-client=”ca-pub-1864068892473603″ data-ad-slot=”3849256657″ data-ad-format=”link” data-full-width-responsive=”true”></ins> <script> (adsbygoogle = window.adsbygoogle || []).push({}); </script>

Mr. Kamal Singh was arrested under Section 69(1) of the CGST Act 2017 and was produced before the Duty Magistrate on 09.02.2012.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has arrested 21 persons in various cases including GST evasion, with the involvement of Rs. 3791.65 crores.

GST vigilance Raids in Aurangabad and Nashik

28.07.2020: Simultaneous searches were conducted on 24th/25th July, 2020 by the officers of DGGI, Aurangabad Regional Unit and Nashik Regional Unit on the premises of a Multinational Brewery located at Aurangabad and a prominent Molasses based Distillery located at Nashik.

During the searches, it was revealed that while the Molasses based Distillery was paying GST on a part of the clearances of Alcohols not fit for human consumption, the clearances of an extremely large quantity Alcohols not fit for human consumption were suppressed and such clearances were neither being reflected in the GSTR 3B returns filed by them nor was any GST being paid on such clearances. The scrutiny of the documents revealed that during the period from July 2017 to 24th July 2020, the Taxpayer had cleared 21.09 Lakh Litres of Alcohols not fit for human consumption valued at app. Rs. 11.59 Crore/- without payment of GST of Rs. 2.09 Crore/-.

The searches also revealed that the Multinational Brewery was suppressing the clearances of Draff/Spent Wort which arises in the pre- fermentation stage during the process of brewing of barley for the manufacture of Beers. Draft/Spent Wort is completely different from ‘Dried Distillers Grain with Solubles (DDGS)’ or ‘Wet Distillers Grain with Solubles (WDGS)’ in as much as the former arises in the pre-fermentation stage of the brewing process while the latter arises in the post fermentation stage of the distillation process. The scrutiny of the documents revealed that during the period from July 2017 to June 2020, the Taxpayer had cleared 12638115 Kg of Draff/Spent Wortwithout payment of GST of Rs. 71,08,940/

An ancillary aspect of evasion was also detected during the investigations that the Taxpayers had not properly reversed the Input tax Credit availed on the goods and services which had been used by them for the manufacture of Alcohols fit for human consumption on which no GST is leviable. The total amount liable to be paid by the Taxpayers on this ground is expected to be Rs. 1.16 Crore approximately.

The Taxpayers have paid Rs. 65.17 lakhs on the spot. A substantial part of the outstanding GST liability is expected to be deposited by them after arrangement of funds in the coming days. If the time schedule for payment is not adhered to, action for attachment of properties may be initiated by the Department to safeguard the Revenue.

600 Crore Scam: GST Intelligence Books 3 Firms

27.07.2020:The Directorate General of GST Intelligence (DGGI) books case against M/s. Fortune Graphics Limited, M/s. Reema Polychem Pvt. Ltd. & M/s. Ganpati Enterprises. These firms are found involved in issuance of GST invoices without any actual supply of goods.

Therefore, the case was detected and developed by the officers on further data analytics out of a case booked against one of the exporters, M/s Anannya Exim. It was covered in the all India joint operation launched by DGGI-DRI in September 2019, against various exporters for fraudulently claiming IGST refund on the strength of ineligible ITC.

Further, during the investigations conducted by the DGGI Hqrs, it has emerged that the aforesaid three Companies namely M/s. Reema Polychem Pvt. Ltd., M/s. Fortune Graphics Limited and M/s. Ganpati Enterprises have issued invoices worth more than Rs. 4,100 Crore wherein tax amount of more than Rs. 600 Crore has been fraudulently passed on as ITC credit to different entities.

In this regard, three persons have been arrested for committing offences under GST Act. Two of them, who were on the run and were continuously avoiding presence in DGGI Headquarters, are directors/proprietor of M/s Fortune Graphics Limited, M/s Reema Polychem Pvt Ltd and M/s Ganpati Enterprises. The third person is the director of M/s AB Players Exports Pvt Ltd and controller of various other export firms/ companies who has claimed IGST refunds on the strength of fake invoices issued by these firms.

All the three persons have been arrested by DGGI (Hqrs.) for committing offences under the provisions of Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 and remanded for judicial custody by the Magistrate

Rs 281 Crores ITC scam busted by CGST Meerut

23.03.2020: In another investigation led by the CGST Meerut team revealed the issuance of fake GST invoices of Rs. 1,708 crores. This was a chain of fake companies operating from Delhi, Moradabad, and Meerut, involving fraudulent ITC of about Rs 281 crores.

On the basis of the initiative taken by the Chief Commissioner, Meerut, the Data Analytics team analyzed suspected firms. Further, they passed on information on the basis of which CGST Meerut unearthed a case of issuance of fake GST invoices without actual supply of goods and passing on the said fraudulent ITC to the other existing firms after circulation of invoices through a chain of fake firms/ companies which are non- existing. Also, these firms/ companies were operating from a small Janta Flat in Rohini Sector-6, New Delhi.

Further, the modus operandi, inter alia, involved not only creating fake firms/ companies by misusing the IDs of different people. Also, these companies were involved in purchasing non-active companies from others and getting the names of directors changed and using these for fake GST billing purposes. Before passing the ITC to ultimate business buyers, ITC was rotated multiple times among the non-existing firms and companies to make it difficult to find the trail. Against these fake invoices, ITC was passed on to existing firms/ companies for further utilization in the payment of GST. The end recipients from these fake firms made payment through Bank which was subsequently withdrawn and returned back to those end recipients in cash after deduction of certain commission. On preliminary scrutiny, it appeared that the accused namely Shri Pradeep Kumar (kingpin) and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad had taken multiple GST Registrations at the common address using a common email ID and mobile number.

During the search conducted at Meerut, Moradabad, and Delhi, incriminating records, cash of Rs. 9.56 lakhs, flex boards of several firms, rubber stamps of various firms/ companies, digital signature dongles, Credit / Debit Cards with different names, photographs, Bank checkbooks, PAN cards, etc. have been recovered & seized.

The offense committed by the accused Sh. Pradeep Kumar and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad is covered under Section 132(1)(b) & (c) of the CGST Act 2017, falling in the category of a cognizable and non-bailable offense under Section 132(5) and the same is punishable under Section 132(1)(i) of the said Act. Accordingly, the above 3 accused were arrested under Section 69 of the CGST Act, 2017 on 20.03.2020 and produced before the Economic Offences Court at Meerut. They have been sent to jail on judicial remand for 14 days on 21.03.2020 by order of the Special CJM, Meerut. Further investigations are underway.

GST Anti-Evasion Team sends two people behind the bars

19.03.2020: The GST Officers of Anti-Evasion team, Central GST Commissionerate, sends two people in judicial custody. The arrest was made towards availing the fraudulent Input Tax Credit on the basis of fake invoices and evasion of GST by utilizing the said fraudulent ITC of Rs. 24 crores approx. by M/s Shub Conductors LLP.

Further, It is known that among other firms, M/s Een Een Sales Corporation and M/s A.N. Marketing had passed on fake ITC to M/s Shub Conductors. Similarly, during the investigation, Shri Naresh Goel and Shri Anil Kumar Yadav, proprietors of M/s Een Een Sales Corporation and M/s A.N. Marketing respectively, agreed to have passed on fraudulent ITC to M/s Shub Conductors LLP, among other parties, by raising fake invoices without actual supply of goods.

During the process of investigation, residential property and 6 vehicles owned by Shri Vishal Gupta and Smt. Divya Gupta along with the bank accounts of M/s Shub Conductors LLP were provisionally attached under Section 83 of the CGST Act, 2017.

Further, Shri Vishal Gupta, Partner in M/s Shub Conductors LLP committed an offence under the provisions of Section 132(1)(c) of the Central Goods & Services Tax Act (CGST), 2017, which is a cognizable and non-bailable offense, punishable under Section 132(5) of the CGST Act, 2017. Accordingly, Shri Vishal Gupta was arrested on 17.03.2020 under Section 69(1) of the CGST Act, 2017 and remanded to judicial custody by the Duty Metropolitan Magistrate (MM) till 31.03.2020.

How Delhi Commissionaire exposes another GST Fraud of Rs. 12 Crore?

08.03.2020:The CGST Delhi Commissionerate exposes another fake input tax credit of Rs. 12 crores from 30 fake firms. The accused person was arrested on 07.03.2020 under Section 69(1) of the CGST Act, 2017 and sent to judicial custody till 21.03.2020.

The accused person did create various fake firms in the name of his employees and made them, the operators of such fake firms. Also, fake e way bills were generated for issuing fake invoices with different vehicle numbers. Thus, the accused person was receiving fake invoices from these fake firms to avail the input tax credit. Further, the accused person was to make the payments to these operators from the bank. Thereafter, he used to get back the cash after deducting the commission up to 50% of the tax value invoices in these fake/goods-less invoices.

Similarly, the accused person was procuring the non-GST paid goods from the small unregistered suppliers/traders without making payment of tax to the government. Further, he used to pass on such fake Input tax credit to his end buyers. The investigation is still in progress.

Rs. 436 crore Fake Input Tax credit Racket busted

02.03.2020: The Anti-Evasion team of Central GST Delhi East Commissionerate burst a racket involving fake input tax credit worth Rs. 436 crores. It was informed that three persons were operating a total of 17 fake firms to procure invoices without actual supply of goods and availed as well as passed on ITC fraudulently. Out of that Rs. 11.55 crores were fraudulently claimed as refund under Inverted Duty Structure.

The accused persons are related to each other by marriage and have been avoiding investigation for the past month. During the investigation, it was revealed that the accused persons had conducted a major hawala operation in conjunction with certain bank employees. As stated above, these 17 companies exist only on paper and were created for the purpose of expressing fake invoices and passing them to ITC. Companies, recipients, and suppliers on both sides of the transaction were found to be non-existent.

Further, the three-person namely Mr. Asif Khan, Mr. Rajiv Chhatwal and Mr. Arjun Sharma have committed crimes under sections 122 (1) (b) and 122 (3) (C) of the CGST Act, Section 2, which are cognizable and non-bailable offenses. The provisions of section 122 () and the Act are punishable under section (i) of sub-section (2) of section 202 of ibid. They appear to have committed the crime in accordance with section 122 (1) (e) of the Act.

Accordingly, these persons were arrested at 01.03. 2020 under section (1) (C) of CGST Act 2017. They are remanded to judicial custody till 13.03.2020 by the Chief Metropolitan Magistrate in Patiala House Court.

CGST Surat Exposes Bogus GST Billing & ITC of Rs 40 Cr.

26.12.2019: The surat commissioner has unearthed a racket of fake invoicing, IGST refund and input tax credit of Rs. 40 crore. The three firms involved in this racket has fraudulently availed ITC of amounting Rs. 20 crore for payment of IGST on goods exported. Later, these firms claimed a refund on such exports. Read the full story from below press release.

GST Intelligence exposed another fake Invoice Racket worth Rs. 136 crore

25.10.2019: The GST Intelligence of Gurugram Zonal Unit arrest Sh. Rajiv Gupta on 23.10.2019 in relation to fake invoice case. He is the partner of M/s RST Batteries, Mundka Delhi and Director of M/s RST Batteries Pvt. Ltd Bahadurgarh, Haryana.

The person found to be defrauding the government exchequer for revenue of Rs. 20 crores. It is known that the person was issuing fake GST invoices in the name of 52 bogus firms he opened.

The person is sent now for 14 days of judicial custody for further investigation. Till now, the Gurugam Zonal Unit has arrested 10 persons in similar cases and exposed fake invoices racke of more than Rs 1,500 crores. Thus, the total revenue involves in the above amount is Rs. 280 crores due to the government.

GST ITC fraud o f Rs. 5.70 Crores: CGST Commissionerate arrest 3 person for committing offense

25-07-2019: The CGST Commissionerate of Gurugram, Haryana arrests three persons viz, Sh. Anil Kumar, Dist.- Hisar, Haryana, Sh.Bhikaram, KhajuriKhas, Delhi-110094 and Sh. Kuldeep Sharma, Sonipat Haryana.

The investigating team found that, they created a bogus firm in the name of M/s Palak International, Gurugram, Haryana on the fake ID documents of a person namely Sh. Jitender. This is for the purpose of issuing many fake invoices without any movement of actual goods.

Thus, M/s Palak International, issued various invoices amounting Rs. 31 Crores(approx.) with a GST value of Rs. 5.70 Crores. Further, this company has passed this fake Input Tax Credit of Rs. 5.70 Crores to the various buyers. Later these buyers availed the fake ITC to discharge their GST liabilities against their outward supply.

Therefore, all three accused were produced before the Hon’ble Judicial Magistrate, 1^st Class, Gurgugram, Haryana. Later sent them to judicial custody of 14 days on 23.07.2019. 

Till now, the GST & Central Tax, Gurugram, Haryana has recovered an amount of Rs. 3 Crores (approximately) towards the evasion of GST.

5.06 Crore GST ITC Fraud: Intelligence arrest proprietor of M/s. Shree Balaji Enterprises

18-07-2019: The GST Intelligence of Gurugram has arrested the Proprietor of M/s. Shree Balaji Enterprises, A-43, SaraswatiVihar, North-West, Delhi-110034.

The above Firm had taken ITC fraudulently of more than Rs 5.06 crore which involves the value of Rs28.11 crore on the basis of invoices issued by fake firms.

Thus, later the said firm, utilized fraudulently taken ITC to discharge their GST liability against the outward supply, to defraud the Government Exchequer.

Furhter, Shri Ajit Jindal was arrested on 12.07.2019 under Section 69(1) of the CGST Act, 2017. Thus, was produced before the Chief Judicial Magistrate, Gurugram. The Chief Judicial Magistrate, Gurugram has sent Sh.Ajit Jindal to Judicial custody of 14 days. Similarly, the further investigations in the matter is in progress.

Fake Input Tax Credit Invoices – Measure and Arrest under GST

02-02-2018: Central Delhi Commissioner has arrested two businessmen based in Rohini on 01st August 2018.  This arrest took place because these businessmen issued fake invoices of input tax credit.

This is fake because these businessmen have only issued invoices and actual supply did not take place.

This has resulted in tax evasion of approximately Rs. 201 Crores.  It is said that these businessmen were involved in plastic granule industry business.

GST Search team could find various documentary evidence in this regard during its search operation.   The arrest of these businessmen is taken place as per section 69(1 ) of the CGST Act 2017.  Also, both of them were produced before the Honorable Metropolitan Magistrate, at Patiala house.  It has brought to notice that further investigations are going on and such cases are about to rise in nearby future.

Author  View:

Well, I believe it has become a very easy job for the government now to track such evasion of tax cases.  As per my opinion, GSTN can now easily trace the input tax credit evasion.  Let us see how this becomes possible.

Let us say M/s. ABC issued 5 invoices Worth Rs. 50 lakh which includes GST payment of Rs. 90 thousand in the name of M/s. Xyz.

On the other hand, Mr. XYZ will claim input tax credit (ITC) of Rs. 90 thousand to set off his liabilities.

Let us assume, During the return filing process, Mr. ABC will not declare his outward supplies. That means he will show less tax payment.    At the same time, Mr. XYZ will claim ITC of Rs. 90 Thousand on fake invoices.  Therefore indirectly GSTN can see an increase of ITC compare to output tax liability.

Since suppliers declare the HSN wise summary of outward supplies it’s very easy to know on which product the government gets more tax.  However, it would have been easier for GSTN to trace the ITC based on outward supplies if GSTR 2 (Details of inward supplies) would have uploaded by the receiver of the goods or services.  Therefore to avoid fake invoices every receiver check is input tax credit availed with that of outward supplies declared by the supplier.  This reconciliation can be done by downloading GSTR2A data from GST portal.  GSTR2 return contains the details of outward supplies uploaded by the supplier.

The receiver should periodically check GSTR 2A entries with his input tax credit entries.  If receiver notice he has availed ITC but he can’t see said entry in GSTR 2A then he should ask the supplier to upload it and pass the credit to the receiver.  If the supplier doesn’t do it then the receiver may ask refund of availed ITC and reverse the availed with interest.

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Input Tax Credit on GST

The most important feature of GST is the Input Tax Credit (ITC) available under this system. Thus, it is available as an advantage of the entire chain involved in the cycle. more

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Here are the documents required and conditions for claiming an input tax credit under GST. The Input tax credit can be obtained by a registered person only. more

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A) Mr. X, the registered person was paying tax in the composition scheme till 30th July 2018. Is he eligible for ITC?. more

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• How to Search and verify GST Number online?
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