Officials of the Central GST Commissionerate, Coimbatore, have initiated investigations against some units for doing only bill trading by way of issuing invoices without supply of goods.
According to an official press release, the officials initiated investigations against three firms and Mohamed Ariff was the main conspirator behind the bill trading. He approached the court, which ordered him to deposit ₹5 crore and co-operate with the investigation. The fake invoices issued by these companies were used by many scrap dealers and the tax amount in the fake invoices was availed as input tax credit and used forfurther bill trading ortax payment for supply of non-duty paid goods procured without bills from the open market.
On following up this investigation, it was found that Nishok Iron and Steels received and availed of credit of ₹5.19 crore from invoices issued by seven firms, including the three firms already investigated. The otherfour were non-existent units from Chennai. The company, Nishok Iron and Steels, managed by M. Manickam, had received fake invoices without actual supply of goods on commission basis. Sri Balaji Metals (M. Chandramohan),registered as scrap dealer but actually involved only in bill trading, has also availed of credit of ₹4.95 crore against fake invoices. The release said that underthe GST law, supply of goods without invoice orissue of invoice without goods and availing of credit against such invoices was a serious offence that attracted arrest if the amount of tax evaded exceeded ₹2 crore.
Both Manickam and Chandramohan were arrested under GST Act. The credit availed by Nishok Iron and Steels is more than ₹5 crore and is a cognizable and non-bailable offence and the credit availed by Sri Balaji Metals is less than ₹5 crore and is noncognizable and bailable offence. Furtherinvestigation against various scrap dealers and end users who received invoices without actual supply was under progress, the release said.