CGST cracking down on fraudsters

CGST sleuths came down heavily upon offenders of tax evasion and fake ITC availment cases in Raigad region of Maharashtra. As more as two such cases have been booked by the sleuths and the accused have been sent to the judicial custody. Further investigation was still on.

Talking to Bizz Buzz, Manpreet Arora, Commissioner, CGST and C Ex, Raigad, said: "It is a clear message to tax evaders and generators of fake ITC, that the govt will leave no stone unturned to safeguard economy and book the fraudsters. We will come with heavy hand to curb this nuisance. Now, it's high time, offenders come to right side of law and let nation progress."

Based on information that Shubham HP Security Force, I was involved in evasion of CGST by way of collecting the tax from their customers and not depositing the same, hence the investigation was carried out. It was also found that there is a gross anomaly in turnovers declared to the Income Tax authorities and the CGST Authorities. The said mismatch led to a huge tax evasion detection amounting to Rs 6.06 crore. On verification of financial records of the tax payer, it was found that most of the invoices were issued with GST at the rate of 18 per cent and the tax was collected accordingly from their customers. However, the tax so collected was not reflected in their GST returns nor deposited with the Government.

The services provided by them are security services and the clients include BMCT, JNPT, CDAC and RCF. The security services do not qualify for any exemption and some of the clients such as CDAC have stated that they have already paid GST to the tax payer. Further, the tax payer himself has admitted the fact of collection of tax and non-deposition of the same.

The Tax payer is a habitual tax offender and earlier demand Rs 5,45,63,685 for Service Tax is pending for the period 2014-15 to June, 2017 is pending realization as tax collected, but not paid. On reasonable belief that the tax payer has committed an offence as specified under sub-section (1), clauses (d) of Section 132 of the CGST Act, 2017, which is a cognizable and non–bailable offence under Section 132 (5) of the CGST Act,2017, the CMD of Shubham HP Security Force I was arrested on July 12.

The JMFC, Panvel, vide order dated July 13, has remanded the accused to Judicial custody of 14 days. The CGST sleuths have also booked a case relating to the fake availment of input tax credit (ITC) to the tune of Rs 9.95 crore in Belapur in New Mumbai against Pulsating Exim. The company had availed ITC on the strength of invoices raised by suppliers Magic IT Solutions and Magic I&E which are fake companies. The anti-evasion team of the department apprehended the mastermind involved in the case.

Multi location searches were conducted and it was found that Pulsating Exim has also availed ITC on the strength of fake invoices raised by various other parties. The mastermind has been arrested and sent for 14-day judicial custody.