Commercial Tax Department unearthed GST Fraud of Rs.73 Crore

The State Commercial Taxes Department uncovered a shell company involved in a fake sale of coal for Rs.73 crore through evasion of Goods and Services Tax (GST).

According to the investigation, the firm sold coal worth Rs.73 crore without any acquisition and applied false GST input tax credit.

The firm’s business activity was not discovered in its location, Madhubani area, and the proprietor was identified as a rural woman who is not active in any type of business, it stated.

The CTD investigative section discovered through data analytics that the bogus firm sold coal worth Rs.73 crore without any purchase and that the complete amount of tax was paid through ITC (input tax credit) even though there was no ITC available for payment.

“Further research revealed that the fake entity is a participant in the fraudulent GST input tax credit (ITC) scheme.” According to the statement, “the phoney firm operates as an initiator and has passed on false/illegal claims to numerous other firms in its supply chain.”

It has supplied coal to 19 companies, including 14 from Jharkhand, two from Bihar, and one from each of Uttar Pradesh, Maharashtra, and West Bengal.

During the first stage of the Jharkhand trail investigation, officers discovered that four of the 14 Jharkhand firms’ registrations had been annulled by the tax authorities, proving the sham character of this conspiracy. The remaining ten businesses were likewise newly registered.

Pratima, the Commissioner and Secretary of Commercial Taxes, assured reporters that individuals implicated in the scheme would face severe punishment.

“The department is also investigating other trails and traders showing shipments in order to prevent fraud and tax cheating in the coal trade,” she added.