The Delhi government’s Goods and Services Tax (GST) department on Saturday unearthed a rupee 347 crore “false invoicing scam” involving 11 companies and one person was arrested in connection with it, according to an official press release.
“The companies engaged in circular exchanges and issued false invoices to claim a fraudulent input tax credit (ITC) in order to evade the tax,” the statement said.
The owner of “Super Steel India Ltd, Mayank Jain, considered one of the pillars of the scam, has been arrested,” he said.
Jain was remanded in custody for 14 days. Further arrests could follow during the investigation, the statement said.
Delhi State GST Department Law Enforcement Officials Uncovered Rs 347 Crore “Fake GST Billing Scam” Spread Across 11 Companies, He Said .
Businesses were engaged in issuing “false or inflated” invoices, with no actual supply of goods. They also used to settle unrecorded transactions in cash, the statement said.
Several of the 11 companies were also found to be owned by one person and could have been created to create long tax chains to avoid detection under tax laws, the statement said.
Through a complex data-driven investigation, department investigators found that four of 11 companies filed tax returns from computers with the same IP address, six companies had the same contact number, and four were using the same email id, according to statement.
He said two other companies even had the same bank account number.
During a secret check conducted by inspectors from the department, none of the 11 companies were found at their headquarters, the statement said.
“Total tax evasion in the chain is expected to be around Rs 40 crore and this figure could increase as the upstream and downstream resellers of these companies are examined in more detail,” he said.
The GST department will also undertake an investigation into other companies in the trading chains of these “suspicious” companies, including those located outside Delhi, the statement said.
The department recently created a cell dedicated to “bogus business investigations” to detect and take action in cases of ITC fraud. Another 2.5 crore rupee tax evasion case was discovered and recovered from a major mobile phone provider by the enforcement cell on Friday, he added.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)