GST Evasion: GST Dept. raids on Companies in Uttarakhand; Detects Tax Fraud of Rs.5 crores availing Fake ITC

The Uttarakhand GST Department discovered Rs.5 crore in GST evasion during searches in Kashipur on two enterprises engaged in the ‘recycle’ of old batteries and two transport companies supplying goods services to them.

Phoney Input Tax Credit (ITC) was used for evading taxes worth around 5 crores, according to the Uttarakhand Goods and Services Tax Department. Businesses, according to the government, were submitting fraudulent ITC claims on bogus paper bills in order to decrease their GST payments.

The GST departments of all states have been closely monitoring fraudulent ITC applications and other tax evasion schemes.

The destination-based GST is evaluated at the point of final consumption of goods and services. The GST system is meant to be a comprehensive and unified tax system with the goals of streamlining the tax law, reducing tax evasion, and increasing tax compliance.

The Jharkhand State GST department raided two battery recycling companies as well as two additional transportation companies that supplied services to the recycling industry.

According to the state tax agency, the government’s Central Intelligence Unit (CIU) has been monitoring the transactions of these four companies for some time.

It was also stated that the enterprises attempted to demonstrate product acquisition by printing E-way invoices and displaying toll plaza passes on empty and other goods-carrying cars.

The government’s thorough monitoring of tax evasion via raids is favourable. The false raids conducted by GST officers for personal advantage as well as the benefit of other departments cannot be ignored by taxpayers.

Surat Police recently arrested three persons after they conducted a phoney raid on a textile store and demanded 12 lakh rupees from a proprietor. The other two were forgeries, and one of them pretended to be a Central Goods and Services Tax (CGST) supervisor. The incident occurred on March 30, 2023.