Ahmedabad, Surat becoming bogus GST billing hubs: Govt

 







Since the implementation of Goods and Services Tax (GST), Ahmedabad and Surat have become the hubs for bogus billing in Gujarat, while the web of illegal transactions has also spread to rapidly industrialising districts like Bhavnagar, Rajkot, Morbi and Gandhinagar where a sizeable number of trading and business firms have been found involved in this racket.

Both Ahmedabad and Surat districts account for almost 58 per cent of the Rs 3,094 crore worth of taxes involved in bogus billing rackets in the three years ending June 30, 2021, the state government stated in a written reply to an unstarred question asked by Congress MLA from Petlad, Niranjan Patel about bogus billing in
GST during the recently concluded monsoon session of Gujarat Assembly.

While Ahmedabad reported the highest Rs 971 crore of tax involved in bogus billing, in Surat it was Rs 789 crore. Both Ahmedabad and Surat saw involvement of 250 and 196 firms each, respectively. GST came into effect from July 1, 2017. While this bogus billing racket is being reported from 18 of the 33 districts of Gujarat, smaller industrial clusters like Bhavnagar, Rajkot, Morbi and Gandhinagar are also reporting involvement of large number of firms in producing fake bills.\

Bhavnagar has third highest quantum of tax (Rs 433 crore) involved, where a total of 104 trading units are under scrutiny.

Though the government in its written reply stated that no government officials have been found involved in the bogus billing cases till June 30, 2021, the situation changed the very next month.

Bhavnagar became the singular place in Gujarat where the state government stepped in and transferred 36 officials from one office of SGST department in connection with a Rs 1,000 crore bogus billing case unearthed in July.

Two of these SGST officials including a deputy commissioner were also suspended for their alleged involvement in the case. This is however the first time, the involvement of government officials have come to light.

The data tabled in the Gujarat Assembly also states that 1,037 trading and business firms were involved in generating bogus bills and smaller industrial locations like Rajkot (Rs 333 crore), Morbi (Rs 126 crore) and Gandhinagar (Rs 104 crore) emerged as centres for generation of fake GST bills.


SGST officials in Gujarat The Sunday Express spoke to said that the bogus billing racket in the state involves a complex network of individuals who use these fake bills to illegally claim Input Tax Credit. “This web of individuals could comprise of as many as 50 persons and are roughly categorised by us as initiator entities, pass-on entities and beneficiaries depending on the role they play while implementing the fraud,” said an SGST official.

For instance, in the 2020 case involving one Paresh Chauhan from Ahmedabad, documents were sourced from gullible individuals and the same were used for registrations on GST portal. As the entire system is online, the spot verification of the registered address was not done (it has been made compulsory now).

“Paresh was arrested in beginning of 2020 and is among the first fraud cases in India to go on trial,” the official said adding that 36 entities were involved in the Rs 900 crore bogus billing racket that was being operated out of a rented premises in Ahmedabad city.

SGST officials said bogus billing rackets in Gujarat operate out of not only rented premises, but also have been found operating from premises belonging to some associate remotely connected with the conspirator.

Officials said apart from those firms involved in defrauding tax, there are companies that try to use the bogus bills to inflate their turnover. “This is largely done by firms looking to go for a public listing or those who are seeking loans from banks,” the official added. When asked the reason behind the bogus billing racket spreading to smaller centres, an SGST official said, “The mastermind in most of these cases operate from bigger cities and they spread their network to smaller towns.”

Comments

  1. ramborjamesJanuary 30, 2022 at 9:35 AM

    Thank you for sharing such information with us. Please keep posting this kind of informative articles. psychotherapy billing services

    ReplyDelete

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud...
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the ...
Read more

Income Tax Dept detects ₹350 cr unaccounted cash receipts after raid in Rajkot

Image
  The Income Tax Department carried out a search and seizure operation on a real estate group based in Gujarat's Rajkot and found unaccounted cash receipts in various projects of approximately ₹350 crore, the Finance Ministry said on Friday. The group is among Gujarat’s prominent real estate builders and developers and is actively engaged in real estate, construction and land trading businesses in and around Rajkot. More than 40 premises were covered in the search operation. During the course of operation, many incriminating documents and digital evidences were seized indicating involvement of the group in unaccounted transactions. The IT sleuths found substantial evidence of transactions outside the regular books of accounts, unaccounted cash expenses, cash advances received and interest paid in cash. Evidence of on-money payments in real estate projects-flats, shops and land deals has also been found. Total unaccounted cash receipts in various projects of approximately ₹350 crore...
Read more