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March 4, 2021

CGST, Gandhinagar, unearths a case of GST fraud involving ITC (Input Tax Credit) of Rs. 720 Crore

by CA Shivam Jaiswal in GST

CGST, Gandhinagar, unearths a case of GST fraud involving ITC (Input Tax Credit) of Rs. 720 Crore

On the basis of details downloaded from ADVAIT (Advance Analysis of Indirect Taxes), AIO, E-way bill portal, detail analysis of the information available online, it was observed that, there are many units, which ore having abnormal high turnover. These companies have taken registration for trading of agriculture products and bullions. On further analysis, it was found that all these companies are interconnected. These companies are suspected not only in circular trading to artificially enhance its turnover, but also passed huge amount of ITC without supplying any goods.

Accordingly, searches were conducted on the premises of 16 firms registered with this Commissionerate, which were shown working at Kalol, Harji, Manek Chowk etc. During the course of search, it was found that, no activity was carried out from these premises and most of them were found to be closed and only banner displaying the name and GSTIN of the units, were found.

During the search at premise of Abans Enterprises Limited; huge documents and evidences in form of sale and purchase related documents of various firms were found were recovered. Apart from these documents, rubber stamps of 40 Companies, blank letter pods of 12 companies not registered at the premise were found. Furthermore, six blank lorry receipt books and huge quantity of blank weighment slips of two firms were also recovered. Searches conducted at the transporter mentioned in the blank lorry receipts books and blank weighment slips have revealed that the transport company and weigh bridge are not in existence.

Prima Facie, it is found that there are around 68 units involved in the entire scam and almost all these units are directly or indirectly connected to one of the big corporate group in Mumbai. These units have shown massive turnover of Rs. 40,000 Crore (Approx) and had passed on huge amount of ITC Rs. 720 Crore (Approx) without actual supply of goods. This entire scam is suspected to involve many more serious implications apart from defrauding the government revenue. This is the biggest scam of fake ITC in gst in terms of fake turnover and ITC passed, detected in the state till date.

Further investigation in the matter is in progress.

Commissioner

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