The State Taxation Department Punjab has unearthed a fraudulent Goods and Services Tax (GST) racket, flagging suspicious Input Tax Credit (ITC) worth crores.
According to officials, the racket was being run by multiple forms, most of them based in Ludhiana. The department has initiated process for registration of cases against the accused individuals. To date, 20 cases have been registered in Ludhiana division alone in connection with the fraud.
So far, the department has recovered more than Rs 20 crore from the firms involved or from the beneficiaries who availed or utilised the fraudulent ITC. Divulging details, Randhir Kaur, Deputy Commissioner State Taxes (DCST), Ludhiana Division, said the detection come through analytical comparison of purchase data and e-way bill records. The fraud pertains to fraudulent transactions, misuse of GST registration numbers, and circulation of fake and forged tax documents.
Investigations revealed the firms, which were granted GST registration numbers under the “Ease of Doing Business” initiative, obtained GST registration through fraudulent documents and systematically misused the registrations to generate and pass on fictitious ITC, causing substantial revenue loss to the state exchequer, she said.
On the fraudsters’ modus operandi, officials said it involved issuance and circulation of fraudulent tax invoices without actual supply of goods or services. The bogus invoices were used to avail and pass on inadmissible ITC, defrauding the government and genuine buyers in the supply chain. It was found that several entities had reported substantial inward supplies, but no matching e-way bills existed for the movement of goods or there were other grave discrepancies.
In some cases, when the purported proprietors of the firms were contacted, they denied any association with them and said they had neither applied for nor authorised use of their credentials.
The mobile numbers linked to these registrations were found to be associated with identities created using fake Aadhaar credentials. The bank account details furnished at the time of registration were also found to be unverified and not compliant with norms.
