931 GST Fraud Cases Identified Through Data Analytics

Department of Revenue through data analysis has identified 931 cases of fraudulent GST.The maximum numbers of such cases for Input Tax Creditfrauds have been booked in Kolkata zone followed by Delhi, Jaipur and Punchkula (Haryana).

Refunds of over Rs. 28,000 crore are said to have been filed by over 27,000 taxpayers so far on account of inverted duty structure in the current year. Finance Ministry sources confirmed that such identified taxpayers who have purchased goods from tax evading non-filers would face verification and scrutiny as necessary.

This is being weekly reviewed and monitored by the Union Revenue Secretary, Dr Ajay Bhushan Pandey.

GST formations have booked 6641 cases involving 7164 entities till November last year and have so far recovered around Rs.1057 crore.

Sources added that investigators in Delhi have busted through data analytics a significant fraud case, where fraudsters created a network of over 500 entities comprising of fake billers, intermediary dealers, distributors and bogus manufacturers of hawai chappals for availing and encashing fake ITC credits. The bogus “manufacturers” created in Uttarakhand were making supplies to other fictitious entities & retailers in Gujarat, Maharashtra and Tamil Nadu. The raw materials for the chappals, known as EVA compound, are chargeable to 18% duty whereas chappals are chargeable to GST of 5%. As a result, the law allows the manufacturers to claim refunds of the inverted duty structure in cash.

Another important case was that of IGST fraud from Surat in which preliminary investigations revealed that 19 firms fraudulently claimed ITC to the tune of 55 crore against the fake invoices received by these firms valued at Rs. 679 crore. In this case during the search at the premises of two kingpin firms M/s Satyam Impex and M/s Aatif Fashion, it was revealed that 17 other firms were registered with GST by misusing the identity/documents of daily wagers, casual workers, etc.

Data Analytics wing of GST has been able to identify all such cases involve fake invoicing and fraudulent tax credits, which have been encashed through the facility of IGST refunds.

Source: IT

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