30 GST invoice fraudsters nabbed, law panel to strengthen GST legislation

IANS File Photo
IANS File Photo

NEW DELHI, NOVEMBER 17 (IANS0: The Directorate General of GST Intelligence (DGGI) on the fifth day of its nationwide drive against GST invoice fraudsters arrested five more persons, raising the tally of arrested unscrupulous persons to 30 along with 1,282 entities identified and 393 cases booked so far.

The Law Committee of the GST Council is all set to meet on Wednesday on the issue of fake GST invoice, collusions in availing and passing on of input tax credit and to work out the modalities on required measures such as further tightening of the GST registration process. The meeting will also recommend other legal recourses, including necessary law amendment in the GST Act that would help curb the menace of fake invoicing.

Sources said that the DGGI and CGST field formations will now intensify the drive with much rigour, as the DGGI on the fifth day surveyed and searched business places in Vadodara, Ahmadabad, Chennai, Valsad, Silvassa, Visakhapatnam, Hyderabad, Bhubaneshwar, Siliguri, Nagpur, Meerut, Kolkata, Guwahati, Jaipur, Bengaluru, Ranchi and Mumbai.

Goods and services involved in the searches included waste and scrap of metals (ferrous metals as well as non-ferrous metals), articles of iron and steel, copper wire, plastic granules, PVT resin, milk products (butter and ghee), electronic goods, leather, textile, chemicals, software, waste paper, cement, TMT bar, tobacco products, construction services, works contract services, manpower supply services, advertisement and animation services, other employment and labour supply services etc.

Sources said that in one of the cases, the CGST and CE Surat in Vadodara Zone unearthed a racket of 18 fictitious firms involved in availment/utilisation of fraudulent input tax credit (ITC) without receipt of goods and utilisation thereof for payment of IGST on export goods and also passing on fake ITC to others. These fictitious firms have availed fake ITC with bogus billing. One person named Rohit Kumar Salunke, the mastermind of the web of bogus firms, has been arrested whose office was searched and incriminating documents relating to 18 fake/bogus firms were seized, sources in the Revenue Department said.

For export, these firms purchased inferior quality goods on cash payment from the local market without invoice and on such export IGST was paid utilising fake ITC. For passing on fake ITC to others, they issued bogus invoices without supply of goods, the sources said.

Further investigation is underway to nab all those involved in the racket.

In another case, the intelligence indicated that M/s Skylark Infra Engineering Private Limited in Delhi and Gurugram, engaged in providing security services and toll collection services, had availed ITC on the basis of fake bills and without actual receipt of goods/services. Investigation showed that in 2018-19, there was a drastic shift in GST payment via ITC only (100 per cent) as compared to the previous year, when almost half of such payment was via cash ledger.

It was found that ITC of Rs 10.39 crore was availed from 8 consignors, who were found non-existent at their registered premises. The entity has so far voluntarily deposited GST of Rs 5.07 crore through their cash ledger.