32 cases booked, 17 held for GST fraud

Cases involve multiple bogus or non-existent entities allegedly found to be claiming input tax credits

January 10, 2021 09:10 pm | Updated January 11, 2021 10:12 am IST - NEW DELHI

At least 32 fresh cases were booked and 17 persons, including the managing director and accountant of a Chennai-based firm, have been arrested over the past two days for frauds related to the Goods and Services Tax (GST), revenue department sources said on Sunday.

These cases involve multiple bogus or non-existent entities across the country, allegedly found to be claiming input tax credits (ITC) worth at least ₹384 crore, for supplies of goods ranging from medicines to coal and cement, and even services like providing manpower.

Manpower services

In Chennai, the Directorate General of GST Intelligence (DGGI) zonal unit arrested M. Ashokan, managing director of Srimarg Human Resource Pvt Ltd., along with the firm’s accountant, for availing and passing on fraudulent ITC of ₹22 crore on fake invoices for manpower services.

“This case is similar to that of food delivery chain Swiggy and that of Instakart, a subsidiary of e-commerce firm Flipkart,” a revenue official said, referring to a probe finding that both firms allegedly used fake invoices for manpower supplies from non-existent firms.

Swiggy has recently deposited ₹27.5 crore with the tax authorities, the amount authorities alleged that the firm had availed fraudulently as ITC. The Instakart case similarly involves ₹21 crore of credits.

In Gujarat, 14 firms have been booked, eight of which were found to be non-existent, but had availed or utilised ITC of more than ₹113 crore through fake invoices. Cases were filed against five firms in Bengaluru, while four firms were booked in Indore for incorrectly passing credits worth ₹6.82 crore to soyabean traders.

Fake invoices

Three persons were arrested and cases filed against their firms on the basis of intelligence received from the Maharashtra GST Department for fraudulent availment of ITC and Inter-State GST refund of ₹33 crore, using fake invoices for footwear.

GST fraud amounting to ₹164 crore has been unearthed in two new cases detected in Delhi. “A case of fraudulent availment and passing of ITC to the tune of ₹150 crore was detected at a firm dealing in LED TV and scrap, and its director was arrested for setting up over 12 bogus firms,” the source said.

The widening probe into GST evasion and fraud, for which the Income Tax department has also been roped in along with other agencies, over the past two months has now led to 215 persons’ arrest, including six chartered accountants, a company secretary and two women. In all, 2,200 cases have been booked after busting over 6,600 fake GSTIN (GST Identification Number) entities. Over ₹700 crore has been recovered so far, the official said.

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