GST investigation arm DGGI has arrested 25 persons during the last week for issuing fake invoices for items like waste and scrap of non-ferrous metals, readymade clothes, gold, silver and development providers.
The Directorate General of GST Intelligence (DGGI) has registered about 350 circumstances for issuing fake invoices towards 1,180 entities.
“In a nationwide drive intensified in the second week of November against unscrupulous elements for availing and passing on of the input tax credit (ITC) fraudulently through fake invoices, non-existent or fly-by-night firms and circular trading, so far in just last four days 25 persons have been arrested including two kingpins and two professionals in some 350 cases booked for issuance of fake invoices against 1180 entities,” DGGI was quoted as saying in a press assertion.
This is without doubt one of the largest drives towards unscrupulous components for availing and passing on of the enter tax credit (ITC) fraudulently via fake invoices, non-existent or fly-by-night corporations and round buying and selling. However, searches and investigation are on to establish and apprehend the opposite persons who have been concerned in the racket and in addition the beneficiaries who’ve used the fake invoices to evade GST, Income Tax, and do cash laundering.
DGGI and CGST formations have taken actions in Delhi, Bengaluru, Mumbai, Ludhiana, Chennai, Nagpur, Kolkata, Gurugram, Jind, Ballabhgarh, Ahmedabad, Surat, Vadodara, Bhilai, Jodhpur, Hyderabad, Mathura, Raipur, Visakhapatnam, Jamshedpur, Patna, Imphal, Meerut, Guwahati, Pune, Siliguri, Bhopal and Bhubaneshwar.
Major items concerned in these circumstances together with articles of iron and metal, copper rod/wire, waste and scrap of non-ferrous metals, plastic granules, PVC resin, readymade clothes, gold and silver, development providers, works contract providers, Agro Products, Milk Product, cell, manpower provide providers, commercial and animation providers.
Earlier, DGGI, Mumbai Zone had arrested Sunil Gutte, son of a sitting MLA and sugar baron Ratnakar Gutte and Managing Director of Sunil Hi-tech alongside along with his enterprise affiliate Vijendra Ranka, the 2 kingpins of fake bill scams price of Rs 520 crore of ITC in Maharashtra.
In one other main case, the Delhi CGST Zone had reportedly, registered a case of GST fraud towards M/s Krishna Trading Co. which was discovered to have issued invoices with out the availability of products passing on ITC amounting to roughly Rs 397 crore.
The drive towards the GST evaders and ITC fraudsters is anticipated to additional intensify in days to come back and lots of extra arrests can be executed, DGGI sources mentioned. A prime supply mentioned that circumstances would even be investigated towards the beneficiaries by the Enforcement Directorate for cash laundering.
According to experiences, the fake invoices usually are not solely used for evading GST and revenue tax, but additionally for inflating the bills to siphon off cash from the businesses by unscrupulous homeowners, transferring the cash overseas via hawala and bogus or inflated imports and exports.
“They are also used to obtain higher loans from banks, siphon the loan money, become NPA and then abuse IBC process to move to NCLT, and thereby defraud banks and other financial creditors. Fake invoices are also misused by the unscrupulous exporters to claim higher GST refund and MEIS’s incentives which the Government has decided to terminate and replace it by RoDTEP from January 2021,” ANI reported quoting sources.
Apart from taking motion towards the accused below GST legal guidelines, Income Tax Act and Prevention of Money Laundering Act, issuers of fake invoices in addition to beneficiaries of such invoices it’s being examined if they are often detained below COFEPOSA, sources mentioned, including additional that the process for new GST registration can be being tightened.
The nationwide drive, which began on November 9, was intensified after a high-level assembly in the Department of Revenue. DGGI and its Zonal Units additionally sensitised the top of the sphere formations on the longer term plan of action and the framework of the crackdown.
Later, a plan was chalked out whereby DGARM, DGGI, and CBDT have been to collate knowledge towards the suspected entities who have been indulging in fake bill racket, sources mentioned.