The central GST department of Ghaziabad has arrested two persons in connection with issuance of fake GST invoices without actual supply of goods. According to officials, the invoices worth Rs 115 crore were issued and in the process caused a loss to state exchequer to the tune Rs 37 crore.
“Two directors of the firm M/s Shumstar Global Business Solutions Ltd Anil Kumar Dubey and Praveen Kumar Rai were arrested from their Indirapuram and Delhi residences, respectively” said Alok Jha, commissioner, central GST, Ghaziabad.
“On specific complaints our department, on Friday, raided nine places in Ghaziabad and elsewhere which includes the offices and residences of the accused. The accused during questioning said that their companies dealt in supplies of iron and steel electronics and same was registered on GST portal and was availing input tax credit through non existent firms” added Jha.
Explaining the modus operandi Jha said that the accused through 21 bogus firms issued invoices worth Rs 115 crore to others only on paper and in the process caused a loss to state exchequer of Rs 37 crore. “On establishing the crime the accused were booked under Section 132 of CGST Act, 2017 and was produced before CJM court in Meerut” added Jha.
He further explained that there is a term ‘Input Tax Credit’ through which one can avail credit of tax already paid by the person or business behind him in the supply chain so that there is no double taxation but the when it is done through fake invoices which obviously means that real supply of goods has not taken place this results in fraud.
Earlier in February, one person was arrested in a similar GST fraud case in which invoices worth Rs 98 crore were issued by the proprietor of the firm and in the process causing loss to state exchequer to the tune Rs 37 crore.
In recent times, many fake firms have been caught up by various anti-evasion and tax investigation agencies which have estimated tax implication to the tune of Rs 15,000 crore in the country.