The officials of the Delhi government’s Goods and Services Tax (GST) department on Saturday unearthed a Rs 347-crore “fake billing scam” involving 11 firms and one person was arrested for involvement in the case.
The firms were engaged in circular trading and issuing fake bills to claim fraudulent Input Tax Credit (ITC) to evade taxes.
The proprietor, believed to be one of the kingpins of the scam has been arrested by the department on Saturday and has been remanded to 14 days judicial custody by the judicial magistrate. More arrests may follow as the investigation unfolds.
According to a statement released by the department, “The firms were engaged in issuing fake inflated invoices, without actual supply of goods. They also used to settle unaccounted transactions in cash. It was also discovered that several of these 11 firms belong to only one person and could have been set up for the purpose of creating long tax chains to avoid detection under tax laws.”
“Through a complex data-driven investigation, sleuths of the department uncovered that 4 of these 11 firms had filed the tax returns from computers with the same IP address. Also, 6 firms had the same contact number and 4 were using the same email-id. Another 2 firms even had the same bank account number. In a secret verification conducted by the department inspectors, none of the eleven firms was found to be existing at its registered address. The total tax evasion in the chain is expected to be close to Rs. 40 crores, based on the ITC availed by these colluding firms,” the statement reads.
It is to be noted that the department has recently established a dedicated ‘Fake Firms Investigation’ cell to detect and take action in such fake and fraudulent ITC cases. Such action will include the arrest of the key scamsters as per the provisions of the Central and Delhi State GST Act. Only December 31 Rs. 2.5 crores tax evasion was unearthed and recovered from a prominent mobile phone supplier by the enforcement cell.
(With IANS inputs)