GST fake invoices scam: 25 Arrested, 350 cases registered against 1180 entities

 GST fake invoices scam

GST investigation arm DGGI i.e. The Directorate General of GST Intelligence has arrested 25 persons over the last week.

 

DGGI last week has arrested 25 persons over a week ago for giving phony bills i.e. fake invoices for merchandise like non-ferrous metals, gold, silver, readymade articles of clothing and infrastructure building, a source said.

The DDGI has registered around 350 cases against 1,180 entities for issuing fake invoices.


Further investigation is on to nab the other offenders in the fake invoice scam and also those who use fake invoices to evade the GST, Income Tax, and to do money laundering.

DGGI was quoted as saying in a press statement that "In a cross country drive heightened in the second seven day stretch of November against corrupt components for profiting and passing on of the Input Tax Credit (ITC) deceitfully through fake invoices, non-existent or unreliable firms and roundabout exchanging, so far in most recent four days 25 people have been captured including two head honchos and two experts in approximately 350 cases reserved for issuance of phony solicitations against 1180 entities". "Major items associated with the cases are MS/SS scrap, substances of iron and steel, copper pole/wire, squander and piece of non-ferrous metals, readymade articles of clothing, , mobile, milk items, plastic granules, agro products, PVC resin, gold and silver, construction services, works contract services, manpower supply services, advertisement and animation services, etc,” a source said.

Considering the way that fake invoices and hawala rackets have their hurtful effect on the working of the economy, the cycle for enrolling for the new GST is additionally being modified. This is probably the greatest drive against degenerate through phony solicitations, non-existent or fleeting firms and roundabout components for profiting and passing on of the Input Tax Credit (ITC) falsely exchanging.
DGGI and CGST have taken actions all over India in tier-1 and tier-2 cities.

Earlier, in a major uncovering of the scam, DGGI, Mumbai Zone had captured son of a sitting MLA and sugar noble Ratnakar Gutte and Managing Director of Sunil Hi-tech Sunil Gutte and his business partner Vijendra Ranka in the Fake Invoice scam worth of ITC Rs 520 crore in Maharashtra.

In another major incident, the CGST Zone, Delhi had reportedly, registered a case of GST fraud against M/s Krishna Trading Co. which was allegedly found to have issued invoices without the supply of goods passing on ITC amounting to approximately Rs 397 crore.

The drive is expected to intensify further in days to come and many more arrests will be made, DGGI sources said. As per top sources investigation would be initiated by the Enforcement Directorate for money laundering against those receiving benefits of fake invoices.

" The invoices are similarly being misused to gain greater proportions of advance from banks, channelizing the loan amount for something else, making it NPA and a while later controlling the IBC cycle to move to NCLT, and thus misleading banks and diverse credit supervisors. Fake invoices are also in use by the corrupt exporters to call for higher GST refund and MEIS's incentives which the Government has decided to terminate and replace by RoDTEP from January 2021," ANI revealed citing sources.
"It is additionally being thought upon whether other than enlisting arguments against the recipients under GST laws, Prevention of Money Laundering Act and Income Tax Act, activities under guarantors as well as recipients of phony solicitations can be taken under Conservation of Foreign Exchange and Prevention of Smuggling Activities (COFEPOSA) Act," the source said.

The cross country drive, which started on November 9, was heightened after a significant level gathering in Department of Revenue which was attended by all senior authorities of DGGI, GSTN, GST, ED, CBIC and CBDT alongside their Chairmen and the Principal Chief Commissioners/Chief Commissioners of Central GST zones the nation over.

All the future course of actions was also discussed in the meeting and the heads of all departments were informed of the framework involved in cracking down the case.

Fake invoices are also used by corrupt exporters to claim higher GST refund and MEI’s incentives. Fake invoices affect the treasury of the nation and nabbing the culprits every year has become a priority.

Inputs From:

PTI

Outlook

TribuneIndia

India TV

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