DGGI busts racket availing illegal ITC worth over Rs 50 crore, 1 arrested
Oct 23, 2020
New Delhi [India], October 23 : Officials of the Directorate General of GST Intelligence (DGGI) have busted an illegal racket, involving 115 companies, and arrested an aspiring charted accountant for alleged involvement in the wrongful passing on of Input Tax Credit (ITC) to the tune of Rs 50.24 crores, Finance Ministry sources said.
Around 115 fake firms spread in nine Goods and Services Tax (GST) Commissionerates, have been found with the help of data analytics, to be involved in illegal availment and wrongful passing on of ITC.
Prince Manish Kumar Khatri a third-year student and partner of a CA firm has been arrested in Ahmedabad for registering the fake firms.
Finance Ministry sources said that the DGGI is keeping non-intrusive but a close watch through rigorous data-mining and data analytics on such dubious and unscrupulous elements who in the garb of professionals take up illegal availment of ITC and evasion of GST.
Sources said that Khatri is allegedly the key person involved in the registration of 115 non-existent firms and filing of GST returns of such fake firms, thus passing on ineligible ITC for wrong availment and utilisation for GST payment.
According to the sources, it was noticed that some 55 suspicious firms were registered under the jurisdiction of Commissionerates of Vadodara and Ahmedabad on a few mobile numbers and e-mail accounts.
On further analysis of these suspicious firms, it was found that the cash credit ratio of tax payment was very less. Data analysis showed that for the period for which these firms were active, the ITC availed and ITC utilised for filing GSTR 3B were almost the same. These firms might be issuing fake invoices to the recipients without actual supply of any goods/services who in turn are availing Input Tax Credit (ITC) on the basis of these fake invoices.
According to sources, these firms were registered in the rural areas of Dahod on the basis of documents obtained fraudulently. Out of 115 fake units, 49 units fall under Ahmedabad North Commissionerate, 27 units under Vadodara-II Commissionerate, 15 units under Bhiwandi Commissionerate, 12 units under Gandhinagar Commissionerate, 5 units under Ahmedabad South Commissionerate, 3 units under Jodhpur Commissionerate, 2 units under Vadodara-I Commissionerate, 1 unit under Thane Rural Commissionerate and 1 unit under Bhavnagar Commissionerate.
The Finance Ministry sources said that rigorous data mining and data analytics have helped in a very big way in curbing the fake firms and fraudulent ITC claims.
"Now the use of Aadhaar in GST registration will bring better control over such unscrupulous professionals who try to create bogus/fake firms for GST evasion by fraudulent availment and passing on of ITC. Such elements are also, very often vocal on social media against various apt measures taken by the government on GST to curb bad/malign practices," said a top source.
