The Directorate General of GST Intelligence (DGGI) has recently arrested the accused in the fake Input Tax Credit (ITC) claim case in Surat.
A specific intelligence that the firm of the accused is engaged in the fraudulent activity of availing Input Tax Credit on the basis of invoices issued from bogus firms leading to wrongful availment of ITC.
The investigation unearthed a chain of more than 05 fake/bogus/non-existent firms at Surat, Gujarat allegedly involved in creating and passing on fraudulent ITC.
The accused stated that the purchase was made through brokers. It was also stated, however, that no brokerage was paid. Further, the existence of any such brokers could be proven by the accused during the investigation.
The Investigating Officer, in his arrest, production and remand application statement said that, the submissions made by the accused and another raised the reasons to believe that the broker story explained by him would be an attempt to mislead the investigation. The Investigating Officer also expressed his opinion that no such brokers might exist, from the lack of any commercial contract or relationship between the firm and brokers.
The arrested accused was produced in Court on Saturday.
The Directorate General of Goods and Services Tax Intelligence (DGGI) has detected tax frauds to the tune of more than Rs. 54 Thousand Crore during the Financial Year 2021-22 and recovered more than Rs. 21 Thousand Crore of such evaded tax.
DGGI has unearthed a number of modus operandi by which tax evasion was been done such as–
(i) short payment of tax by undervaluing taxable goods and services,
(ii) wrong availment of exemption notifications,
(iii) wrong availment / non-reversal of input tax credit,
(iv) non-payment of tax on supply of taxable goods and services (clandestine removal),
(v) tax collected but not paid to Govt. exchequer,
(vi) non-payment of tax under reverse charge mechanism,
(vii) fraudulent availment of input tax credit on the basis of invoices from fake firms,
(viii) fraudulent availment of refund of IGST on export of goods, etc.
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