Central Goods and Services Tax-Uttarakhand has detected a GST evasion case of ₹20.83 crore and arrested the proprietor of a city-based firm for issuing fake invoices to various entities across India. Thakur Traders from Dehradun passed on fraudulent Input Tax Credit (ITC) worth more than ₹20 crore by issuing goods-less invoices in excess of ₹135 crore (inclusive of GST).
Ishrat Ali Ansari, the proprietor of one of the beneficiary firms, A&A Trading Co., Dehradun, was arrested and sent to 14-day judicial custody. CGST Uttarakhand has been developing intelligence about GST evasion from different sources, including informers and data analysis. 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 utilized to reduce the GST liabilities causing huge losses to the government exchequer.
Thakur Traders obtained GST registration on forged documents like ‘edited electricity bill’, 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. Searches under Section 67 of CGST Act 2017 were carried out by a team of officers at the office premises of Thakur Traders.
The beneficiary firms of this fraudulent ITC chain in Uttarakhand were identified, and 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.
During interrogation, the proprietor of A&A Trading Co., Dehradun revealed that the firm Indian Trading Co. was created by him to utilize 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.
The proprietor of A&A Trading Co. who has utilized fraudulent ITC to the tune of ₹9.36 crore 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
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