The Officers of the Central Goods and Service Tax (CGST) Commissionerate of Coimbatore arrested the trader for evading the taxes for more than 5 crores by issuing invoices without the supply of goods, however, according to the sources, the total tax evasion amounts to Rs. 10.42 crores in which the investigation is still going on successfully.
Information about invoice trading (bill trading) without the supply of products was acquired by officials. The GST Commissionerate discovered during its investigation that the traders had engaged in bill trading, which involved receiving and issuing invoices without actually receiving or supplying any items.
Additionally, apart from the issue of invoice, it was discovered that the unit had illicitly claimed ineligible Input Tax Credits (ITCs) without actually receiving any goods and had transferred these ITCs to their various buyer units intra-state and inter-state, most of whom were traders in scrap wood and lumber, without actually supplying any goods, leading to significant GST evasion.
If the amount of tax evaded reaches 2 crores, it is a major offence under the GST law to supply goods without an invoice, to issue an invoice without goods, or to claim ITC against invoices produced without the provision of goods. In this case, the total tax evasion is 10.42 crores which is 5 times the limit made under the GST act.
According to Section 132 of the 2017 CGST Act, the evasion involved is greater than the prescribed value, making it a crime that is both cognizable and punishable by bail. More research is being done.
The Section 132 of CGST Act, 2017 outlines the penalties for certain offences. According to the section, anyone who commits and retains the benefits resulting from the supply of goods without an invoice or issues invoices without the supply of goods with the intent to evade tax is subject to punishment for the second and every subsequent offence, which may result in a five-year prison sentence as well as a fine.
The company’s owner confessed to the crime and was apprehended by police from the Head Quarters Preventive Unit in Coimbatore. The Chief Judicial Magistrate of Coimbatore then remanded him in custody for a period of 15 days.
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