Revenue secretary Ajay Bhushan Pandey has asked tax authorities to look into suspicious claims related to input tax credit and integrated goods and service tax (GST) involving shell companies as the government resumes the fight against black money, sources told CNBC-TV18. “Revenue secretary has told his office that there is an urgent need to weed out shell companies, shell proprietorship and shell partnership from the system,” said sources. Sources added that Pandey in a recent communication asked the central board of direct taxes (CBDT) and the central board of indirect taxes and customs (CBIC) to do a fresh analysis to unearth shell companies from the system.
To ease their efforts, Pandey has asked both the boards to strategise various measures, including “triangulation of information, maintaining fresh parameters for a risk score, begin excessive use of artificial intelligence machine learning to revamp the systems and to work out high-risk criterion so that system itself red flags suspicious accounts,” said sources. The move came on the back of a recent tax evasion case involving Manpasand Beverages. Three top executives of Vadodara-based firm were arrested by the Goods and Services Tax (GST) department for creating fake company units and committing tax invasion. The government has in recent years beefed up its surveillance of dormant and shell companies. With the help of various enforcement and investigative agencies of the government, around 2.26 lakh shell companies were struck off in the first drive in the fiscal year 2014 and 2015. Similarly, 100,150 companies were struck off till November 30, 2018.