Rs.470 Crore Fraudulent GST Claims Unearthed

Rs.470 Crore Fraudulent GST Claims Unearthed

The Directorate of Revenue Intelligence and the Directorate General of GST Intelligence have unearthed fraudulent claims of over Rs.470 crore of Integrated Goods and Services Tax and fake invoices of Rs.3,500 crore, in a nation-wide massive search operation.

The searches showed that some of the exporters were exporting their goods on payment of IGST, using credit for taxes paid on inputs. While there is no harm in using input tax credit to settle one's tax liability, the data and intelligence gathered showed that the credit was based on fake supplies.The IGST payments on exports were claimed back as refunds.

Later, it was noticed by the authorities that there was neither or negligible payment of tax through cash by the exportes, as well as their suppliers.The authorities also found that in a few cases, the tax was paid through ITC, and was more than the ITC (input tax credit) availed by these companies, that led to one of the biggest search operations conducted across 15 states across the country, including Delhi, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Chhattisgarh, Gujarat, Maharashtra, Karnataka, Telengana, Tamil Nadu, Rajasthan, Punjab, Uttarakhand and Himachal Pradesh.

The government has gone after entities that have made fake or bogus sales and export claims and use of data, that involved matching the GST and income tax returns. It threw up several cases where the entities were found to be sham companies.