GST Evasion of Over Rs. 20 Crore Detected; One Arrested

The Central Goods and Service Tax (CGST) Dehradun Commissionerate discovered a Rs.20.83 crore GST evasion and arrested the proprietor of one city-based enterprise, an official stated.

Ishrat Ali Ansari, the owner of one of the beneficiary firms, A&A Trading Co., Dehradun, has been arrested and placed in 14-day judicial custody, according to Deepankar Aron, commissioner CGST Commissionerate Dehradun. Thakur Traders, based in Dehradun, issued goods-less invoices totaling more than Rs. 135 crore (inclusive of GST) to various entities throughout India and passed on fraudulent Input Tax Credit (ITC).

“In addition to informants, the officers heavily rely on data analysis. This office has launched a significant campaign against organisations that have used or benefitted of fake ITC to escape paying taxes. A nexus of recently registered businesses has been transmitting enormous sums of ineligible ITC within a very short time of their registration, according to intelligence inputs. The government exchequer suffers damages as a result of the use of this bogus ITC to settle the GST bills,” he claimed.

According to Aron, a probe into Thakur Traders, Dehradun, was started in light of this situation. Early research has shown that Thakur Trading has sent bills totaling more than 135 crores to numerous organisations registered all throughout India and has transferred 20 crores in input tax credits. Further investigation revealed that this company had registered for GST using falsified papers such a “edited electricity bill.” A team of officers later conducted searches at Thakur Traders’ office space in accordance with Section 67 of the CGST Act 2017 and discovered that it was a non-existent entity created solely for the purpose of transferring fraudulent Input Tax Credit without actually supplying any goods, the official said.

SK Traders, Dehradun, Pravin Enterprises, Indian Trading Company, Dehradun, A&A Trading Co., Dehradun, Anurag Enterprises, VK Enterprises, Dehradun, and Laxmi Enterprises, Haridwar were among the beneficiary companies in this fake ITC chain in Uttarakhand, according to the commissioner.

The Anti-Evasion personnel of the CGST Dehradun Commissionerate conducted follow-up searches at the declared premises of the aforementioned firms. All of these entities and taxpayers were discovered to be non-existent at their registered locations during the course of the searches. Investigations further showed that the aforementioned taxpayers never existed at their stated principal place of business, engaged in no commercial activity, and were fictitious entities established solely for the purpose of transferring false Input tax credits, the official added.

Aron reported that numerous incriminating documents, including multiple chequebooks, bogus invoices, debit cards, and more of other businesses in this fraudulent network were recovered during the search at the residential premises of the proprietor of Indian Trade Co. in Dehradun. He declared, “The owner of Indian Trade is currently on the run and has been dodging numerous summonses given to him.”

According to Aron, the owner of A&A Trade Co. in Dehradun admitted during questioning that the company Indian Trading Co. was intentionally set up to use bogus ITC and dodge taxes. Thereafter, searches were also carried out at A&A Trading Co.’s other suppliers, situated in Kanpur and Muzaffarnagar, which also turned out to be fake. In light of this, the owner of A&A Trading Co. was detained on Friday under Section 69 of the CGST Act, 2017 and sentenced to 14 days in judicial jail for using illegal ITC to the tune of 9.36 crore. He also appears to be a part of a larger nexus.

“A prison sentence of up to 5 years in addition to a fine is imposed for the evasion of such a significant sum of GST dues. Further research is being conducted on a number of other topics,” he continued.