The GST enforcement wing in the state has unearthed a racket, which used fake bills to claim input tax credit worth Rs 129 crore over multiple transactions routed through different chains. The input tax credit was claimed on fake invoices worth Rs 712 crore. Input tax credit is an option in GST which allows the traders to claim credit for taxes paid on purchase.
The alleged mastermind of the racket, Kashmira Kumar Agrawal, director of M/s. Madhumita Steels Industries Private Limited, has been arrested from Sambalpur, an official release said on Monday. Consequent upon tracking of a chain of fraudulent transaction followed by scrutiny of suspected e-way bill transactions and collection of intelligence, physical inspections were carried out simultaneously at 14 business establishments. These were, however, found to be non-existent and fictitious, the official release said.
During interrogation, proprietors of these fake firms admitted that they were neither doing any business nor doing any purchases/sales in the name of their firms and the transactions reflected in their returns were only paper transactions without any actual receipt and supply of goods. All of them also categorically admitted that they had neither deposited nor withdrawn any amount from the bank account opened in the name of their firm, the official release further said.
The banking transactions in the name of the firms had been undertaken by the mastermind by misusing the signed cheque book and RTGS forms taken from the innocent persons in whose name registration had been taken fraudulently and in some cases by forging their signature. Investigation reveals that the mastermind, hired middlemen to collect credentials such as PAN card, Aadhaar card, photograph, etc, from persons of no means (housewives, drivers, plumber etc.) of Sundargarh and Sambalpur district on the pretext of giving them gainful employment/ handsome amount of money in every month but misused the documents to fulfil his own vested interest and defrauded the government revenue, the official release said.