Multi-crore scam involving GST evasion through Rlys unearthed

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A scam of Goods and Services Tax (GST) evasion, which could run into several crores involving several Multi National Companies (MNCs) and top national industries, has surfaced in the State with companies in connivance with some of the Railways officials transporting goods from New Delhi or other Stations to Jammu without payment of the GST. Director Vigilance (Police), Railways Board, New Delhi, Gareeb Dass told the Excelsior that a high level independent inquiry has been ordered into the reports of tax evasion scam running into several crores after the matter was brought to his notice by top officials of Jammu and Kashmir, engaged in implementation of the GST rules.

“The issue has been brought to my notice. It’s very serious matter if Railway bogies have been used for transportation of costlier goods without payment of GST. We have started an independent inquiry into the scam and will shortly come out with details. Stern action under the rules will be taken against all those found guilty,” the Director Vigilance said. The State Government officials have, meanwhile, also written to the Central Bureau of Investigations (CBI) and GST Council in New Delhi briefing them about the scam and seeking immediate remedial measures to plug the lacunas in proper implementation of the Act so that the evasion of GST doesn’t go unchecked.

Elaborating on modus operandi of the scam, sources said, the companies, which included some prominent names in the market having annual turnover of thousands of crores, used to book bogies on lease in the train for transportation of their goods from New Delhi or any other destination to Jammu without payment of GST on the goods. “In the process, the companies were helped by some of the Railways officials, may be at the lower level, to facilitate loading of goods without payment of taxes. The goods were off-loaded with the help of Railways staff either at Jammu, Udhampur or Katra depending upon the situation, where there was no checking at that particular time, and then safely shifted to godowns of the companies in the State,” sources pointed out.

They said that in case of surveillance at all three major stations of Jammu, the Railways staff sometime used to send back the items to New Delhi and they were brought back in another train when the surveillance was over,” sources said, adding that some of the Railways staff was involved in the racket and were in constant touch with each other, both at Jammu and New Delhi besides other places to facilitate transportation of goods without taxes. Senior Railway officials were not available for comments. “This modus operandi was going on for the past quite some time but situation seems to have aggravated during past few months when the authorities discovered gap in collection of taxes and during surprise raids detected that goods were being smuggled in bogies of the trains from New Delhi or some other States to Jammu without payment of the taxes,” sources said, terming the scam as that of very serious nature in which the Central and State Governments might have lost SGST and CGST worth several crores.

They pointed out that some noted companies were also involved in the illegal practices but said it would be ascertained only during the inquiry as to whether the top officials of these companies were involved with Railway officials in facilitating the scam or it was being done at lower level. The State Government officials have, meanwhile, also written to the Central Bureau of Investigations (CBI) as well as the GST Council seeking permanent solution to the new techniques developed by the companies for tax evasion by taking Railway bogies on lease and transporting goods in them without payment of tax. The Director Vigilance Police, Railways Board, New Delhi, has also been sounded, who has already initiated an inquiry. The Government also proposed to sound the GST Council on tax evasion to take corrective measures. 

Meanwhile, when approached for comments, Additional Commissioner, Sales Tax, Administration and Enforcement, Jammu, Mohammad Shahid Saleem confirmed to the Excelsior that practice of tax evasion using Railways services as a mean has been detected and said they have approached the Director Vigilance Police, Railways Board, Northern Railways officials and also written to the CBI and the GST Council briefing them on new kind of modus operandi used by the companies for tax evasion. Saleem said it was because of their strict surveillance that the scam has been detected and now follow up action will be taken. According to sources, some of the companies, which were found involved in tax evasion, have been identified and asked to submit entire details of the goods transported by them through Railways, or other modes of transport, from July 2017 to January 2019.

Read more at: http://www.dailyexcelsior.com/multi-crore-scam-involving-gst-evasion-through-rlys-unearthed/