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Fraudulent GST Claims Made using Fake Invoices

GST Invoices

In the biggest ever nationwide search operation against fraudulent claims of Integrated GST (IGST) refunds, the Directorate General of GST Intelligence (DGGI) and the Directorate General of Revenue Intelligence (DGRI) have seized fake invoices of ₹ 3500 Crore and busted fraudulent claims of more than ₹ 470 Crore of IGST refunds. On Wednesday, nearly 1200 tax officials carried out search operations on exporters and their suppliers at 336 locations.

The searches conducted by those officers showed that some exporters were exporting goods on payment of IGST while using credit for taxes paid on inputs. Although using input tax credit (ITC) to settle your tax liability is not a reason for offense, data and intelligence gathered by authorities found that the credits were based on fake supplies. The IGST payments on exports were claimed back as refunds and the agencies are investigating the refunds of about ₹ 450 Crore.

After an in-depth analysis of the data provided by the Directorate General of Analytics and Risk Management (DGARM), it was found that there is little to no payment of tax through cash by both the exporters and suppliers. Furthermore, in regards to a few cases, the tax paid through ITC was comparatively more than the ITC claimed by these firms. The search operation covered 15 states including Delhi, Uttar Pradesh, Haryana, Maharashtra, Gujarat, MP, Tamil Nadu, Karnataka, Telangana, Rajasthan, Punjab, Himachal Pradesh, Chhattisgarh, and Uttarakhand.

The Finance Ministry in a statement said, “The joint operation of the two premier intelligence agencies of Central Board of Indirect Taxes and Customs (CBIC) was a first of its kind in the history of CBIC, which involved about 1200 officers from both the agencies.” The statement added that the massive searches were conducted based on the data and intelligence gathered by DGGI and DRI, two agencies which specialize in economic offenses.

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