Fake GST Bill: Tax officials turn the heat on errant transporters

After arresting several offenders for fake GST bills, officials of DGGI are now after the errant transporters who are involved in the supply of undervalued goods to evade GST, sources confirmed.

New Delhi:Widening the scope of its crackdown against the use of fake GST bills, GST intelligence officials are now after those errant transporters who are involved in the supply of undervalued goods to evade GST, ETV Bharat has learnt.

According to sources in the department of revenue, ministry of finance, officials of Directorate General of GST Investigations (DGGI) have been investigating some companies in national capital Delhi and Himachal Pradesh that were involved in undervaluation and transportation of goods in connivance with Punjab based transporters.

Officials said during the raids on Ludhiana and Jalandhar based transporters, field formations have seized unaccounted goods.

“Ludhiana Golden Transport Service of Ludhiana and MNK Transport Company of Jalandhar are actively involved in evasive practices of transporting under-valued goods,” a source told ETV Bharat.

“During the search at Ludhiana Golden Transport Service, consignments of different types of goods were found in the premises. On examining the documents such as invoices, e waybills available at the premises, the goods were undervalued,” said the source, adding that further investigation was needed to ascertain the loss to the exchequer.

Sources in the Directorate of GST Intelligence said a considerable number of transporters too were involved in evading the tax through the transportation of undervalued goods.

According to preliminary investigations, the goods were either unaccounted or were undervalued by 20-30 per cent.

“Searches were conducted at the transporters’ premises in Ludhiana, Jalandhar and Delhi and also simultaneously at the premises of the suppliers of these goods in Delhi and Himachal Pradesh at various locations,” said an official.

“Goods mainly involved were footwear, shoes, plastic sleepers, tobacco, shaving foam among other things,” he added.

140 GST offenders arrested

According to officials, a total of 140 offenders which include five chartered accountant and a lady mastermind from Chennai has been arrested in the largest ever nationwide crackdown against the use of fake GST bills.

The officials have so far booked 1,488 cases against over 4,800 bogus entities involved in either claiming or assisting others in fraudulent claim of the input tax credit (ITC) under the GST.

In recent times, the GST officials have stepped up the use of data analytics and use of big data by combining the different databases available with GST, income tax and customs officials to detect fraud and wrong doing.

Most of the cases involve use of fake GST bills issued by the bogus GST firms without actual sale or supply of goods and services.

GST intelligence officials have also found the tendency among some businesses to create fake entries to inflate their turnover as they seek to borrow higher amounts from the banks who cross check their GST return to ascertain the turnover of a business.

Mumbai Chartered Accountant arrested

Chandraprakash Pandey, a Mumbai based chartered accountant, became the fifth chartered accountant who has been arrested in the nationwide ongoing drive against the use of fake GST invoices.

Officials of DGGI Mumbai last week arrested Pandey, a partner in CP Pandey and Associates for being involved in circular trading by using fake GST invoices for availing and passing inadmissible input tax credit.

According to DGGI Mumbai zone officials, Pandey was involved in GST fraud of over Rs 10 crore on a turnover of over Rs 59 crore.

Officials said Pandey has created several bogus firms in the name of his family members to show sale and purchase without actual supply of goods and services. He is also accused of helping other companies in claiming inadmissible input tax credit.

“These were nothing but transactions on paper without actual supply of goods,” said officials.

Initial investigation has unveiled a network of around 50 firms registered in the same premise.

Pandey was arrested on Thursday and produced before a Mumbai court on Friday, which remanded him to 14 days judicial custody.

Earlier GST intelligence officials arrested four chartered accountants, Ankur Garg from Ludhiana, PVV Satyanarayana and Bondalapati Srinvasa Rao from Hyderabad and Akshay Jain from Visakhapatnam.

(Article by Krishnanand Tripathi)