Fake GST RacketOfficials of the Directorate General of GST Intelligence, or DGGI, have arrested a person for operating a syndicate and issuing fake invoices worth Rs 4,521 crore to avail Input Tax Credit (ITC) benefits under the Goods and Services Tax. Giving information about the arrest in a statement a day ago, the GST Department said that the DGGI officials had made the arrest from Kolkata in West Bengal after receiving a complaint in Delhi. It said that scrutiny of tally data revealed that there are 636 firms operated by this syndicate and the mastermind of the syndicate has admitted that they have only issued invoices in these firms and have not supplied any goods against them .
“Scrutiny of tally data revealed that there are 636 firms run by this syndicate. The mastermind of the syndicate has admitted that they have only issued challans in these firms and have not supplied any goods against them. They have issued invoices having taxable value of approx. Rupee. 4,521 crore ITC implication approx. 741 crore,” the Finance Ministry said in a statement on Friday, January 14.
During investigation the amount of GST was Rs. 4.52 crore has been deposited by reversing the ITC available in the ITC ledgers of these firms. Also so far approx. Rupee. The Finance Ministry said that Rs 7 crore lying in various bank accounts of these firms has been frozen.
The mastermind of this racket, whose name was not immediately revealed, was arrested by the GST authorities on Thursday, January 13, the government said in its press release. He said that further investigation in the matter is on.
The ministry said that the DGGI had recently registered a case against some fake firms which were not present at their principal place of business. To trace the real persons behind these fake firms, the actual address from where the GST return was filed was traced.
“Then searches were conducted on 06.01.2022 in that premises in Delhi. During the search, it was found that the owner is engaged in providing services of ‘cloud storage’ on its servers to various customers for maintaining their financial accounts,” the finance ministry added in its press release.
The government revealed that a probe into a suspicious server found details of some firms in the tally data. “It was informed by the owner that this tally data is being maintained by a Kolkata based syndicate. The address details of these persons were obtained from the owner and then searches were conducted on 10.01.2022 (January 10, Monday) at various premises in Kolkata,” the press release said.
During the searches, a huge quantity of incriminating documents including mobile phones, various check books, tickets of various firms and SIM cards were recovered, the statement said. On analysis of electronic devices, documents, mobiles and e-mails of these persons, it has been found that these persons are maintaining data remotely on servers found on the premises in Delhi.
Every business that comes under the ambit of Goods and Services Tax (GST) must issue an invoice containing a valid GSTIN, showing the breakdown of the integrated GST collected by the business firm. However, to evade tax, some unscrupulous businessmen issue fake GST invoices, which can be identified through various processes. The GST Department is regularly tracking and apprehending these businesses to promote transparency.
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