Pune CGST department exposes input tax credit fraud worth Rs 700 crores


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Sumit Singh

Pune, October 6, 2019: The Headquarters Preventive Wing of Pune-II, CGST Commissionerate while acting on intelligence has busted a modus operandi of issuing fake GST invoices without receiving or supplying any goods.

Two firms namely M/s Reliable Multitrading and M/s Himalaya Tradelinks obtained GST registrations and have together issued fake GST invoices of approximately Rs 700 crores with GST component of Rs 54 crores to facilitate bogus Input Tax Credit (ITC) claims and dupe the Govt Exchequer.

VN Mangaraju, Joint Commissioner of Pune CGST II Commissionerate, in a press release stated, “The accused are a part of a racket involving issue of fake GST invoices to claim fraudulent input tax credit (ITC) from the government without any receipt or supply of goods. As per GST laws, ITC can be availed only against taxes paid to the government on receipt of goods or services. However, firms such as those of the accused exist only on paper and offer bogus transactions without any supply of goods. Such transactions are used by other firms to claim ITC without actual receipt of goods. Bogus LR and Eway-Bills have been generated to show transportation of goods.”

According to officials, during search conducted at premises of these firms, incriminating documents were seized by the Head Quarter Preventive Unit (HPU) of Pune-II, CGST Commissionerate. It was observed that these documents were fabricated and made according to GST compliance norms to make the transactions appear real. The statements of the accused were also recorded who have admitted to this modus operandi.

The officials further added that Amit Ashok Thepde and Vilas M Atal, the partners of these firms, have committed offences under the provisions of Sections 132(1)(b) and (c) of CGST Act, 2017 which are punishable under the provisions of clause (i) of Section 132 (1) of CGST Act, 2017. As per the provisions of sub-section 5 of Section 132 of CGST Act, 2017 the said offence is cognizable and non-bailable.

“Consequently Thepde and Atal were arrested on 04.10.2019 by a team of Headquarter Preventive Unit under Section 69(1) of CGST Act, 2017. Further investigations in the matter regarding involvement of other firms and financial transactions between these firms are in progress”, the press release stated.

The Central GST department is monitoring such fraudulent activities and will take stringent action against people indulging in such activities to defraud government exchequer.

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