Officials of the Central GST Commissionerate here have detected issue of fake invoices without supply of goods.
A release from Principal Commissioner (GST) Rajesh Sodhi said investigations were initiated against three units - Aliya Enterprises, Vinayak Trading and Star International - and it was found that these units were doing only bill (invoice) trading without supply of goods. Mohamed Ariff was the main conspirator behind the bill trading. These invoices were used by several scrap dealers. Tax amount in the bill trading was availed as input tax credit and used for further bill trading. This was estimated to have resulted in ₹40 crore loss to the government in terms of revenue.
It was further found that about 15 entities had supplied invoices and more than 50 entities to whom these invoices had been sold. The money trail was also under investigation. The release said that the modus operandi used by these entities was that after the sale of invoice, the recipient transferred the proceeds, including GST, by banking channels. After receipt of consideration, the accused retained the commission, which varied between 10 % to 12 % and refunded the balance in cash.
The total cash withdrawals by the petitioner was about ₹60 crore and the balance turnover done by the petitioner was about ₹170 crore and it was not through banking channels. The Department had attached the suspicious bank accounts of the petitioner.
The main accused had approached the High Court and was ordered by it to deposit ₹5 crore and co-operate with the investigation. Mohamed Ariff paid ₹2 crore and approached the Supreme Court to relax the condition for granting bail. The Supreme Court issued orders last month, asking him to pay the remaining ₹3 crore. However, he failed to pay the amount within the stipulated time. He was arrested and remanded in judicial custody. Further investigation against various scrap dealers and end users was under progress, the release said.
