Businessman gets 5 years Jail Term for ITC Fraud of Rs.17 crore

A businessman from the Haridwar district of Uttarakhand was given a five-year prison term for defrauding the government of Rs.17 crore in input tax credits.

According to the state’s Goods and Services Tax department, this was Uttarakhand’s first conviction for GST evasion. Businessman Surendra Singh allegedly registered six shell companies and falsely claimed Input Tax Credit (ITC) worth Rs.17 crore.

As per Uttarakhand Goods and Services Tax Act, 2017, businessman Surendra Singh was found guilty of fabricating receipts in order to claim an input tax credit worth 17.01 crore. In April of this year, Singh was detained by the central intelligence unit in Dehradun.

Singh established six businesses on the GST portal under his name and the names of his family members, according to Ahmed Iqbal, Commissioner of Taxes for Uttarakhand.

Deputy commissioner, GST, Vinay Pandey said, “Since no bill is made in the personnel supply industry, Singh was required to deposit the GST amount in cash, but in order to receive the ITC benefit and avoid having to pay GST, he produced phoney bills for fictitious organisations. His evaded GST has now been recovered, and the process has started.”

During the investigation, it was discovered that Singh, the owner of PS Enterprises, purchased iron ore and plywood from businesses in Delhi, UP, and Haryana using false identification. Through his five other businesses, he purchased the item. Investigation also turned up the nonexistence of the companies from which it was claimed that false purchases were made. The department filed a claim against Singh for Rs.17 crore based on fictitious purchases. On April 5, 2022, the GST team detained Singh, according to the prosecution’s attorney.

The court also slapped a fine of Rs.1 lakh on him.

The official said the conviction was a morale booster for the department and will discourage other businessmen from indulging in fraud to evade taxes.