GST officials in Uttar Pradesh (UP) have unearthed an alleged tax fraud of nearly Rs 3 crore and detected fake invoices worth Rs 16 crore by an iron scrap dealer, who registered a fake firm M/s Goyal Enterprises, in Aligarh. However, the proprietor of the firm hails from Hapur district. Jugnu Goyal (36) generated fake invoices of about Rs 16 crore and claimed Input Tax Credit (ITC) of about Rs 3 crore in the financial year 2018-19. Around 8 to 10 taxpayers from Mumbai, Ghaziabad, Delhi and Haryana were involved in this racket. Interestingly, the firm’s premises do not exist in Aligarh.
The GST’s Special Investigation Branch (SIB) has recommended the adjudicating authority to file an FIR against them for using fake documents for registration of the bogus firm and also asked the officials concerned to initiate recovery procedure, said HPR Dixit, the joint commissioner of state GST. He added that scraps of iron and steel are charged at the rate of 18%. Talking to TOI, deputy commissioner of state GST, RPS Kautney, said that the firm was registered by Goyal in February 2018, but it was not found existing on the ground at the time of the investigation. Goyal, however, had claimed around Rs 3 crore ITC in the financial year 2018-19 over Rs 16 crore of fake purchase of iron scrap as per electronic-way bills which are required for the movement of goods worth more than Rs 50,000 from one place to another. Vehicles had not moved on the given dates of e-way bills and mismatched with the toll plaza record.
In fact, the mobile number was not found working and unregistered notary rent agreement was submitted along with bank account number, which showed no transactions. The case was closely monitored by the zonal head (enforcement) of SIB, Anoop Maheshwari. Maheshwari added that Goyal had shown fake purchases worth Rs 10 crore from one of the firms, Ram Mohan Build Tech, registered in Mumbai by a Uttarakhand resident, Arvind Pandey. The firm was not registered to sell iron scrap. He added that Pandey, who is the resident of Uttarakhand, has submitted documental evidence such as bank account and rental agreement of Ghaziabad. In 2018-19, 1,620 cases of fake invoices were registered involving fraudulent ITC claim of Rs 11,251 crore under the goods and services tax (GST). As many as 154 persons were arrested. In the first year of the GST roll-out, between July 2017 and March 2018, two persons were arrested and five cases of fake invoices were booked involving an amount of Rs 12.67 crore, finance minister Nirmala Sitharaman had recently stated in a written reply to a question in the Lok Sabha.