For catching more culprits in the input credit scam worth Rs 70 crore, the UT excise, and taxation department will look into all wards for bogus companies registered under the goods and services tax (GST) in two years. A senior official in the department said the department had also written to the police department for lodging an FIR (first information report) against five fake companies. The department has, so far, identified 305 companies that claimed the maximum input tax credit (ITC) under GST in recent years. They will soon get a notice to explain. These five dealers and prime accused had claimed input credit in many transactions. The department has also detected 132 bogus dealers who used fake address for registration under GST in the city.
The investigation has, so far, led to 20 dealers, including five who were penalized, who were not doing any sale and purchase in Chandigarh. The business was kept to Haryana and other states, yet these dealers issued invoices to numerous companies without the actual supply of goods mentioned. This was to facilitate illicit ITC entitlement. The excise department has already withdrawn the GST registration number of these alleged five bogus dealers and slapped a penalty of Rs 17 crore on them. A list of 15 others was sent to the central excise department for action. The list is based on reports received from the other states. Deputy commissioner Mandip Singh Brar, who is also excise and taxation commissioner, ordered this penalty on July 26. Companies are charged with causing a loss to the exchequer by procuring invoices and undertaking fake purchases from nonexistent firms and passing on fake ITC to end-users who used it to offset their GST liabilities.