GST Evasion: Udumalpet Trader arrested for evading GST of Rs.5 Crore

Authorities from the Coimbatore-based Central GST Commissionerate have detained V. Jayachandran of Aravind Traders in Kanakkampalayam, Udumalpet, on allegations of evading GST in the amount of more than Rs.5 crore.

Invoice trading without the supply of goods was the subject of intelligence gathering by officials. During its inquiry, the GST Commissionerate discovered that Udumalpet-based Aravind Traders had engaged in bill trading, which involved receiving and issuing invoices without actually receiving or supplying any items.

Additionally, it was discovered that the unit had fraudulently claimed ineligible input tax credits (ITCs) without actually receiving any goods and had transferred these ITCs to their various buyer units intra-state and inter-state, most of whom were traders in scrap wood and lumber, without actually supplying any goods, leading to significant GST evasion.

The company’s owner, Jayachandran (55), confessed to the crime and was apprehended by police from the Head Quarters Preventive Unit in Coimbatore. The Chief Judicial Magistrate of Coimbatore then remanded him in custody for a period of 15 days.

The entire amount of tax evasion comes to Rs.10.42 crores. If the amount of tax evaded reaches Rs.2 crores, it is a major offence under the GST law to supply goods without an invoice, to issue an invoice without goods, or to claim ITC against invoices produced without the provision of goods. According to Section 132 of the 2017 CGST Act, the evasion involved is greater than the prescribed value, making it a crime that is both cognizable and punishable by bail. More research is being done.