GST and KYC compliance
FinTech industry wants relief in GST and KYC compliance for small loans
January 10, 2020
GST fraud cases
Government unearths 931 GST fraud cases with data analytics
January 14, 2020

GST fraud of ₹110 Crore detected at six firms; one held

GSTR fraud

Six companies were found violating laws by the anti-evasion wing officials of the Central Goods and Services Tax (CGST). They were using unlawful means to earn undue profits, thereby causing a loss of revenue of worth more than ₹110 Crore to the exchequer. The case came to light after Majana Ram, the proprietor of one of the firms was arrested on Friday, for allegedly claiming the input tax credit of ₹12.10 Crore, by showing receipts of purchasing goods for fictitious physical inward supply in his GST returns.

The six accused companies allegedly issued false invoices of purchase and sale to the government without actually supplying the goods. This allowed them to pass on the fraudulent credit of ITC to other companies, availing undue profits. The input tax credit allows an entity to claim rebates for the taxes paid during the purchase of their goods.

GST officials started an inquiry against the private firms upon receiving a top-off. When tax officials visited the registered premises of these companies, they discovered that most of the addresses were either residential or did not exist at addresses mentioned in their registrations as ‘place of business’. On visiting Ram’s iron and steel trading firm, Omkar Enterprises, at Girgaum, tax officials found that the accused was operating the business from his residential premises.

Later, Ram admitted, in his statement, that his firm did not have a godown. He also said that he was aware that laws were being broken and that his firm had purchased or supplied goods and transactions pertaining to purchase and supply were only on paper. Further, Ram failed to provide any GST-compliant document and informed the officials that all his work pertaining to Goods and Services Tax (GST) was being done by a broker. Officials believe that these companies are dummy entities created to carry out paper transactions without actually supplying the goods.

Leave a Reply

Your email address will not be published. Required fields are marked *

49 + = 52






Want to know more about HostBooks?

We'll help you out!






89 − 85 =