The department has, so far, identified 305 companies that claimed the maximum input tax credit (ITC) under GST in recent years. These five dealers had claimed input credit in many transactions. The department has already detected 132 bogus dealers who used fake addresses for registration under GST in the city. The investigation has so far revealed 20 dealers, including five who were penalized, were not doing any sale and purchase in Chandigarh but dealing only in Haryana and other states. These dealers issued invoices to numerous firms/companies without actual supply of goods mentioned and facilitated illicit ITC entitlement. The department has already cancelled GST registration number of the five bogus dealers slapped a penalty of Rs 17 crore. The list of 15 others was sent to the central excise department for action. The list of bogus dealers was prepared on the basis of reports received from other states. Deputy commissioner Mandip Singh Brar, who is also holding the charge of excise and taxation commissioner, on July 26 ordered the penalty.
The accused caused a loss to the exchequer by procuring invoices and undertaking fake purchases from non-existent firms and passing on fake ITC to various end-users who utilized it to offset their GST liabilities. The dealers used fake address for registration under GST in the city. These dealers buy fake bills which enable them to claim input tax credit on the supply which never happened. They also issued invoices to numerous firms/companies without actual supply of goods mentioned and facilitated illicit ITC entitlement. The department has also planned to check records of city markets. In its note put up before the UT administration, the department said, “Soon, we will start checking of bills particularly of those markets where bills are not regularly issued like the furniture market in Sector 34, Shastri Market in Sector 22; electrical market at Industrial Area, Phase II and Burail village and so on.” It has also submitted, “The department is keeping a close watch on all new registered taxpayers and strict legal action will be taken if found bogus or issuing fake bills.”