GST evasion scam of over ₹20 crore detected, 1 held

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The Central Goods and Service Tax (CGST) Dehradun Commissionerate has detected a GST evasion of 20.83 crore and arrested the proprietor of one city-based firm, officials said.

Dehradun-based Thakur Traders issued goods-less invoices, in excess of 135 crores (inclusive of GST) to various entities throughout India and passed on fraudulent Input Tax Credit (ITC) of more than 20 crore, and Ishrat Ali Ansari, the proprietor of one of the beneficiary firms, A&A Trading Co., Dehradun, has been arrested and sent to 14-day judicial custody, said Deepankar Aron, commissioner CGST Commissionerate Dehradun.

Aron said CGST Uttarakhand has been developing intelligence about GST evasion from different sources.

“Apart from informers, the officers are relying heavily on data analysis. A major drive has been taken by this office as regards those entities who have availed or utilised fake ITC in order to evade government revenue. Intelligence inputs reveal that a nexus of newly registered firms has been passing huge amounts of ineligible ITC within a very short period of their registration. This fraudulent ITC is then being utilised to pay the GST liabilities causing losses to the government exchequer,” he said.

Aron said it was against this context an investigation was initiated against Thakur Traders, Dehradun. “Initial analysis has revealed that Thakur Traders has issued invoices in excess of  135 crores to various entities registered across India and have passed on Input Tax Credit of more than  20 crores. On further analysis, it came to light that this firm has obtained GST registration on forged documents like ‘edited electricity bill’ Subsequently, searches under Section 67 of CGST Act 2017, were carried out by a team of officers at the office premises of Thakur Traders and it was found to be a non-existent entity created merely for the purpose of passing on fraudulent Input Tax Credit without actual supply of goods,” he said.

The Commissioner said the beneficiary firms of this fraudulent ITC chain in Uttarakhand were identified, which included Eramet Enterprises, Dehradun, SK Traders, Dehradun, Pravin Enterprises, Dehradun, Indian Trading Company, Dehradun, A&A Trading Co., Dehradun, Anurag Enterprises, Dehradun, VK Enterprises, Dehradun and Laxmi Enterprises, Haridwar.

“Follow-up searches were conducted at the declared premises of the above-mentioned entities by the Anti-Evasion officers of CGST Dehradun Commissionerate. During the course of the searches, all these entities/taxpayers were found non-existent at their registered premises. Inquiries conducted also revealed that the said taxpayers never existed at their declared principal place of business and no business activities were carried out by them and that they were bogus entities created merely on papers to pass on fake Input tax credit,” he said.

Aron said during the search at the residential premises of the proprietor of Indian Trading Co. Dehradun, various incriminating documents, including multiple chequebooks, fake invoices, debit cards and so on of other firms of this fraudulent chain were seized. “The proprietor of Indian Trading is presently on the run and has been avoiding multiple summons issued to him,” he said.

Aron said during interrogation the proprietor of A&A Trading Co., Dehradun revealed that the firm Indian Trading Co. was created by him to utilise fraudulent ITC and consciously evade taxes. Subsequently, searches were also conducted at other suppliers of A&A Trading Co., based in Kanpur and Muzaffarnagar, which in turn also turned out to be fake. Accordingly, the proprietor of A&A Trading Co. who has utilised fraudulent ITC to the tune of  9.36 crore and seems to be part of a wider nexus, was arrested on Friday under Section 69 of CGST Act, 2017 and was sent to 14-day judicial custody. The evasion of such a huge amount of GST dues is punishable with imprisonment of up to 5 years in jail along with a fine. Further investigation on various other aspects is underway,” he added.

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