GST fraud worth Rs. 224 crore detected, 8 companies involved
Officials of the Central GST have unearthed an alleged tax fraud of Rs. 224 crore by a group of eight companies, which generated fake invoices worth Rs. 1,289 crore. A key suspect involved in the racket has been arrested and Rs. 19.75 crore was recovered from him, a press release from the Hyderabad Central GST Commissionerate said yesterday night. Read the details here.
Companies generated fake invoices without actual supply of products
Several documents were recovered during the simultaneous searches conducted yesterday night at the residential and business premises of these companies, which are involved in the trade of iron and steel products, the release said. The companies have been generating fake invoices without the actual supply of TMT (Thermo-Mechanically Treated) bars, MS (Mild Steel) bars, and MS flat products among others, it stated.
Fake invoices involved input tax credit of Rs. 224 crore
The companies were passing on the input tax credit to other taxpayers within the same group, besides some other taxpayers since July 2017. The fake invoices generated by them involved about Rs. 1,289 crore of value and input tax credit of about Rs. 224 crore.
Companies traded fake circulars to inflate their turnover: GST official
"5 out of these taxpayers are operating from the same address and many of the Directors/Partners/Proprietors of these firms/companies, are common," the release said. These companies were also found to be indulging in fake circular trading to inflate their turnover, besides supplying such fake invoices and e-way bills to some others, the GST-officials said. The companies used the same methods to defraud banks also.
Same modus operandi adopted to defraud banks for claiming LCs
"Investigation also, prima facie, reveals that the above modus operandi of issuing fake invoices is also being adopted to defraud the banks for claiming ineligible credit facilities or Letters of Credit (LCs), without any collateral securities," said the press release.
