GST transactions worth over Rs. 1 lakh crore under scanner
Nearly 13,000 business entities, including some big corporations, allegedly availed of input tax credit (ITC) via fake invoices worth more than Rs. 1 lakh crore, for nearly three years, the Directorate General of Analytics and Risk Management (DGARM) has found. The DGARM, which looks after GST data to find tax evaders, has now shared the data with agencies for an investigation, reports HT.
Based on the data shared by DGARM, the government launched a probe almost three weeks ago that led to the arrest of 104 people, three people privy to the developments told the daily. "The data [provided by DGARM] involves names of some big companies and star export houses," one of the persons said. A total of 12,900 companies have been listed.
The fraudulent practice has been going on since July 2017, when the tax regime was implemented. Though agencies haven't put a number on the amount defrauded till March 31, 2020, MoS (Finance) Anurag Thakur had indicated at finer details in Lok Sabha. Between July 2017 and January 2020, the GST-related evasions were pegged at Rs. 70,206.96 crore. Of this, Rs. 34,591.21 crore was recovered.
A person in the know said a nationwide drive was launched last month. 1,161 cases were booked against 3,479 fake entities for getting GST registration illegally, he revealed. "Enforcement agency DGGI [the Directorate General of GST Intelligence] has already started taking action with encouraging results," the person added. Another official said some agencies could also be victims of fake-invoice supply chains.
A third official revealed the government will physically verify all entities that got GST registration without furnishing Aadhaar details from August 21, 2020, and November 16, 2020. He said some entities didn't even own a business, some weren't available at the registered addresses. "They have taken advantage of easy registration process to generate fake bills and misappropriate ITC worth thousands of crore," he said.
On the process, Abhishek A Rastogi, partner at law firm Khaitan & Co., said, "While this move will track a lot of cases where credit may have been taken wrongfully, there are chances that lot of genuine transactions may have to go through detailed scrutiny."