In a week time, GST investigation arm Directorate General of GST Intelligence (DGGI) has arrested 25 persons for issuing fake invoices for goods like waste and scrap of non-ferrous metals, readymade garments, gold, silver and construction services. Over 350 cases has been registered by the DGGI against 1180 entities for issuing fake invoices. "In a nationwide drive intensified in the second week of November against unscrupulous elements for availing and passing on of the input tax credit (ITC) fraudulently through fake invoices, non-existent or fly-by-night firms and circular trading, so far in just last four days 25 persons have been arrested including two kingpins and two professionals in some 350 cases booked for issuance of fake invoices against 1180 entities," a press statement released as DGGI statement.
This is one of the biggest drives against unscrupulous elements for availing and passing on of the input tax credit (ITC) fraudulently through fake invoices, non-existent or fly-by-night firms and circular trading. However, searches and investigation are on to identify and apprehend the other persons who were involved in the racket and also the beneficiaries who have used the fake invoices to evade GST, Income Tax, and do money laundering, said the sources. The actions were taken in the cities including Delhi, Bengaluru, Mumbai, Ludhiana, Chennai, Nagpur, Kolkata, Gurugram, Jind, Ballabhgarh, Ahmedabad, Surat, Vadodara, Bhilai, Jodhpur, Hyderabad, Mathura, Raipur, Visakhapatnam, Jamshedpur, Patna, Imphal, Meerut, Guwahati, Pune, Siliguri, Bhopal and Bhubaneshwar. DGGI and CGST have taken actions against fraudulent concerns. Iron and steel, copper rod/wire, waste and scrap of non-ferrous metals, plastic granules, PVC resin, readymade garments, gold and silver, construction services, works contract services, Agro Products, Milk Product, mobile, manpower supply services, advertisement and animation services were the major targeted sectors. Previously, DGGI, Mumbai Zone had arrested Sunil Gutte, son of a sitting MLA and sugar baron Ratnakar Gutte and Managing Director of Sunil Hi-tech along with his business associate Vijendra Ranka, the two kingpins of fake invoice scams worth of Rs 520 crore of ITC in Maharashtra. The Delhi CGST Zone had reportedly, registered a case of GST fraud against M/s Krishna Trading Co. which was found to have issued invoices without the supply of goods passing on ITC amounting to approximately Rs 397 crore. The actions against the GST evaders and ITC fraudsters will intensify in the future and many more people will be arrested, said the DGGI sources. The Enforcement Directorate for money laundering will investigated against the beneficiaries said a top official.
The nationwide drive started on November 9, was intensified after a high-level meeting in the Department of Revenue. DGGI and its Zonal Units also sensitised the head of the field formations on the future course of action and the framework of the crackdown. DGARM, DGGI, and CBDT were to collate data against the suspected entities who were indulging in fake invoice racket, sources said. GST laws, Income Tax Act and Prevention of Money Laundering Act and also the issuers of fake invoices as well as beneficiaries can be detained under COFEPOSA, sources said. The officials added the procedure for new GST registration is also being tightened.
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