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| CGST Zones and Directorate General of GST Intelligence booked about 8000 cases involving fake ITC of over Rs. 35000 crores in FY 2020-21, Photo Courtesy: Darshak Pandya |
New Delhi (Lisbon Times):- Misuse of the beneficial provision of Input Tax Credit (ITC) under the GST regime is the most common modus of evasion under the GST Law. The field formations of The Central Board of Indirect taxes and Customs (CBIC) have been regularly detecting such cases from the very beginning of the GST regime. During the financial year 2020-21 the CGST zones and the Directorate General of GST Intelligence (DGGI)have booked about 8000 cases involving fake ITC of over Rs. 35000 crore. During the financial year, 426 persons including 14 professionals such as CAs, Lawyers and masterminds, beneficiaries, directors, etc were arrested. Considering the high proportion of fake ITC avail and utilization a nationwide special drive against the fake GST invoice was launched w.e.f. 9th November 2020 which is still continuing.
However
due to the serious Covid pandemic spread during the past two-three months and
related safety concerns, the driver slowed down but with the gradual lifting of
lockdown and improved the Covid-19 situation in different parts of the country, the department has resumed the drive-in coordinated action at the national level.
The crack-down directorate General of GST Intelligence and all the Central
GST formations against the fraudsters responsible for causing loss to the government exchequer have gained momentum during this month. In this nationwide drive
against unscrupulous entities, the Directorate General of GST Intelligence
and CGST Zones under CBIC has during the current financial year detected more
than 500 cases involving 1200 entities and arresting 24 persons. The
number of arrests made by officers of CBIC is one of the highest in recent
times.
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CBIC
officers are using the latest IT tools, digital evidence, and also collecting
information from other government departments to catch the fraudsters. Along with legislative
and procedural changes in the law, the nationwide drive has contributed to
better compliance and revenue collection. During the drive, cases of fake ITC
availed against some well-known companies were also booked.
Some
of the notable cases booked recently include a case by DGGI Nagpur Zonal Unit
against three firms involved in passing on fraudulent Input Tax Credit (ITC) to
the tune of Rs. 214 crore and claiming refund of accumulated ITC in a fraudulent
manner. These firms had submitted fake rental agreements and fake electricity
bills and they existed only on paper without any business activities having
taken place from their registered place of business. These firms were showing
exports of a common product i.e. smoking mixtures for pipes and cigarettes
attracting GST @ 28 % and Compensation Cess @ 290 %.
In another instance, DGGI Chandigarh Zonal Unit booked and apprehended a
mastermind, who was operating fake firms for passing on illegal ITC to the tune
of 115 crores. On information that fictitious/bogus firms were used to pass
inadmissible ITC to various iron and steel units based in Himachal Pradesh,
Punjab and Haryana, searches were conducted at multiple premises in Himachal
Pradesh (Baddi) and Punjab where incriminating evidence in the form of laptops
containing incriminating e-mails, pen drives, mobile phones evidencing
fraudulent transactions were resumed. Similarly, a case of fraudulent ITC was
also booked by the DGGI SuratZonal Unit in which non – existent firms were found to
be engaged in the supply of invoices and passing on illegal ITC to the tune of Rs.
300 crore.
CGST
Jaipur Zone detected a case involving multiple fake firms for
availing/passing on fraudulent ITC of Rs. more than 100 crores in which three
persons were arrested. In another case of ITC fraud, CGST Delhi Zone busted a
network of 23 entities involved in the creation of fake invoices worth Rs. 551
crore and passing on fraudulent ITC worth Rs. 91 crore. These fake entities
were issuing invoices of bituminous mixtures, base metals, furniture, and doors.
Three key persons involved in this fake invoice racket have been arrested. In
another instance, CGST Ahmedabad Zone booked a case of ITC fraud of Rs. 38
crore against thirteen fake entities which were created to pass on fraudulent
ITC by way of issuing bogus invoices of iron and steel.
The
enforcement drive against the fake invoice fraudsters and other GST evaders is
likely to intensify with an objective to catch and book unscrupulous elements
engaged in illegal activities to defraud the government exchequer.
Apart from cases of fake ITC the DGGI and other CGST formations have also detected GST evasion involving misclassification, undervaluation, and clandestine supplies of goods and services.
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