A total of Rs 1,057 crore was recovered by the officials of the anti-evasion wing of the Central Goods and Service Tax (CGST) by registering 6,641 cases involving 7,164 entities, engaged in frauds claiming GST refund under bogus income credit claims, all over the country. Out of the 6,641 cases registered, 931 cases were of fraudulent Input Tax Credit (ITC) cases registered in Kolkata zone followed by Delhi, Jaipur and Punchkula.
The cases of fraud were detected with the help of data analytics which revealed that the fraudsters had created a network of over 500 entities comprising fake billers, intermediary dealers, distributors and bogus manufacturers of Hawai chappals for availing and encashing fake ITC in Uttarakhand. These fake manufacturers were then making supplies to other fictitious entities and retailers in three states including Gujarat, Maharashtra and Tamil Nadu.
The raw material for the chappals, known as Ethylene-vinyl acetate attracts 18 per cent GST, whereas ready chappals are charged 5 per cent GST, which allowed the manufacturers to claim a refund of the inverted duty structure in cash. Similarly, in Uttarakhand, the fraudsters had created over Rs 600 crore of ‘fake credit’ which they would have continued to encash had the fraud not been busted. The main accused in this case was arrested in December and was sent to judicial custody.
In another incident, a fraud of Rs 55 crore was busted in Surat as it was learnt that 19 firms fraudulently tried to claim Integrated Goods and Services Tax (IGST) against fake invoices valued at Rs 679 crore. Again data analysis had helped uncover that these 19 firms had issued invoices valued at Rs.461 crore involving IGST worth Rs 39 crore for exports and invoices valued at Rs196 crore involving GST to the tune of Rs12 crore for domestic supply.