The Directorate General of GST Intelligence (DGGI) has unearthed a Rs 338 crore fake invoicing racket in which fake input tax credit involving Rs 28.97 crore of Goods and Services Tax was generated, officials said on Thursday.
According to the officials, two accused persons — a trader and a tax consultant — were arrested on Tuesday for violation of different provisions of the GST Act. They were produced before the Chief Judicial Magistrate’s court, which remanded them to 14 days’ judicial custody.
Additional Director General (GST Intelligence, Guwahati Zonal Unit), L.S. Gangte, said that the duo was arrested as they were involved in a racket of receiving and issuing fake invoices for coal.
“The firm of a trader showed purchase of coal from Gujarat, Punjab and Delhi to his Guwahati unit to avail input tax credit (ITC). The unit subsequently issued invoices to cement and coke manufacturers, and other traders in the northeast without the supply of any goods.
“The fake invoices and bills for coal, issued by the trader, were used as cover documents for the coal procured clandestinely and to pass on irregular ITC,” the official said.
According to Gangte, the trader of the private organisation created two fake entities by the same name of his organisation in Ludhiana and Gandhidham in Gujarat and showed business transactions between these firms on paper without any supply of goods.
“This huge racket of fake invoicing involved other firms in Delhi, Punjab and Gujarat, which were found to be non-existing. A Guwahati-based tax consultant colluded with the trader and helped in the commission of the fraud,” Gangte said.
The official said the tax consultant was instrumental in dealing with the transactions on behalf of the trader and maintained the accounts and books of accounts, prepared financial accounts and got the accounts audited, besides filing GST returns pertaining to traders in Guwahati, Gujarat and Ludhiana which turned out to be non-existent entities during a recent search.