GST Input Tax Credit Fraud – Rs. 26.09 crore


19.11.2020: The DGGI Nagpur Zonal unit burst fake GST invoice & Input tax credit racket on 18th November 2020. The overall transaction value of such an incident is Rs. 131 crores. whereas the total input tax credit involved in these transactions is Rs. 26.09 crores.

Further, it is reported that it is an Inter-State fake invoice racket with the involvement of 3 Taxpayers. Out of which one is from Maharashtra state and rest 2 are from Karnataka.

Earlier, the GST department conducted searches in remote areas of Chandrapur district against the above taxpayer. In this case, the department took the help of online GST tools to conduct these searches.

Therefore, this search reveals that the taxpayer does not exist and fake. Also, the department notes that the documents on the GST portal of taxpayers are fake. These include proof of address like electricity bills etc. The documents were forged and fabricated.

On the other hand, the investigation team also reveals the details of 2 more Taxpayers of Karnataka. These taxpayers are a part of this racket. They took the GST registration on the same date and declared the same eMail addresses in REG 01. Also, they are sole suppliers/buyers of each other. Here are the details of this racket.

  • Total ITC Fraud Involvement = Rs. 26.09 Crore
  • Total persons involvement = 3
  • Types of Services involvement = Works Contract services, Labour Supply

The department has taken the matter with the jurisdictional DGGI, Zonal Units of Karnataka.

GST Intelligence arrest one person for making ITC Fraud of Rs. 16 Crore

21.06.2019: The Directorate General of GST Intelligence Hqrs. arrested one person, for taking ITC fraudulently, of more than Rs.16 Crore by two firms.  

The two companies involved in these cases are M/s Sushil Kumar Munish Kumar, Hisar, Haryana and controller of M/s Sushil Kumar Munish Kumar & Co., Ahmedabad.

image for gst arrest for fraud

It is known that both firms had taken ITC fraudulently to the tune of more than Rs.16 Crore involving invoice value of Rs.322 Crore on the strength of invoices issued by non-existent fake firms.

Thereafter, these firms passed on such wrong taken ITC to some cotton yarn spinners, who availed the same to discharge their GST liabilities against outward supplies.

Thus, Sh. Munish Kumar has committed offences under the provisions of CGST Act 2017 Sections 132(1)(b) and 132(1)(c which is cognizable and non-bailable offences under Section 132(5) of the CGST Act, 2017.  

Sh. Munish Kumar was arrested on 21.06.2019 under Section 69(1) of the CGST Act, 2017 and produced before the CMM, New Delhi at Patiala House Courts.

Till now, The DGGI Hqrs. has recovered an amount of Rs.28 Crore towards the GST evasion and Further investigations is in progress.

GST Fraud in Mumbai leads in Arrest of two people

March 01, 2018: Officers of CGST Mumbai have captured two business people for making false Invoice and taking ineligible credit under GST. On the other hand the person have been arrest-ed for benefiting input tax credit base-d on false invoices against which no physical movement of goods were purchase-d or sold.  Thus GST Fraud in Mumbai leads in Arrest of two people involved in fake invoicing and wrong ITC.

The power to arrest is exercis-ed under section 69 of the CGST Act, 2017 and is to be
exercis-ed by the Commissioner in instances of out and out extortion where the measure of duty evaded or the amount
of input tax credit wrongly availed exceeds Rs. 2 crore.

Government wants to give guarantee to taxpayers that agreeable citizens don’t risk confronting such corrective
activity in doing their everyday tasks.  The ability to arrest is to be exercise-d where there is a fraud of tax.

It is intend-ed to fill in as a hindrance to deceitful components in exchange who may
endeavor to swindle the framework. Also there are adequate provision with the law to guarantee that coincidental or
procedural breaches don’t pull in extreme correctional measures.

Tax evading practices may take the fraud taxpayers behind the bars under GST.  Arrest under GST is possible as per the GST act mentioned above.  Therefore it is requested taxpayers not to deal in such practices nor allow your supplier to deal in such matters under GST System.

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