GST Intelligence busts fraud exporter companies who put govt at double loss

The fraud exporters availed Input Tax Credit (ITC) on the invoices of non-existing and fictitious firms or such firms which did not purchase themselves.

GST Intelligence has busted a few exporter companies for defrauding the government through fake claims of Input Tax Credit (ITC) and cash refund of around Rs 61 crore. The fraud exporters availed Input Tax Credit (ITC) on the invoices of non-existing and fictitious firms or such firms which did not purchase themselves, said the Ministry of Finance. The ITC thus availed was utilized to pay IGST on the export goods, which was again claimed as a cash refund. Thus, the government exchequer was put at a double loss – on one hand, ITC was obtained on goods where no tax was paid, and on the other hand, IGST paid from such fraudulently availed ITC was obtained as a cash refund.

While the suppliers companies were found to have supplied only bills to these exporters without the supply of goods, the exporters had taken ITC on these fake bills and had taken a refund of the same as the goods were shown to be exported. Directorate General of GST Intelligence had arrested the controllers of the export firms, however, the Ludhiana based owner of the supplier firms was on the run and was untraceable. He was not appearing for investigations even after various summons.

The said owner of supplier firms is a habitual economic offender and numerous cases have been made against him and his companies. Earlier, he had also been put under preventive detention under COFEPOSA in a case of commercial fraud investigated by the DGRI. However, on 7 October 2020, he was caught from a five-star hotel in Shimla after the enforcement agency received an input.

Meanwhile, the GST Intelligence had arrested the director of a private limited company for fraudulently availing and utilising input tax credit (ITC) by issuing fake invoices without any supply of goods or services last month. The company had issued fake invoices worth Rs 139.93 crore to fraudulently avail and utilise ITC to the tune of Rs 19.7 crore and have also availed and utilised ITC to an extent of Rs 14.9 crore on invoices worth Rs 98.48 crore without receiving any goods or services.

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