In what is being described as the tip of an iceberg, the Hyderabad GST Commissionerate has unearthed a GST tax evasion of Rs 8.23 crore by multiple dummy firms, which subsequently resorted to availing and utilising of fraudulent input tax credit. Interestingly, as many as 20 fake firms spread across Andhra Pradesh and Telangana are identified and one such firm detected, for instance, is registered with Goods and Service Tax Network (GSTN) in the name of a sanitation worker. The scam is believed to have been going on for the last nine months. On Thursday, the Hyderabad GST Commissionerate arrested two persons — Majjiga Narsimha Raju and Shaik Shakeer — and remanded them for 14 days.
Raju and Shakeer said to have issued invoices worth Rs 25 lakh and Rs 9 lakh respectively.“They are believed to be part of a large network of people who have floated many proprietorship firms, issued fake invoices levying GST worth Rs 8.23 crore without actual supply of any goods or services against the said invoices,” said an official. “These dummy firms were registered with the department and respective GST returns were filed regularly. However, GST was shown as paid in the said returns, fraudulently by the way of claiming input tax credit based on fake invoices against which no material was received by them,” the official said, while pointing out that the credit itself did not exist as there has been no procurement.
“In retrospect, GST returns without procurement can also be used for generating black money, may be through a bank loan,” said the official. For instance, Tulsiram Karnekote, a sanitation worker, registered himself as proprietor of Tulasi Enterprises in Rajendranagar and has passed on Rs 8.23 crore of fraudulent input tax credit to various fictitious firms without any actual movement of goods or services. “There is no such company or business transactions. As many as 20 firms have been identified. While many are fictitious, we believe the beneficiaries are also among these list of firms,” said the official.