Two Held With 24l Cash Probe Links To GST Fraud Hindustan Times
Authorities seized ₹24 lakh in cash and documents indicating widespread GST fraud in Kolkata.
A GST fraud investigation in Kolkata has led to the apprehension of two individuals allegedly involved in generating fake invoices to claim undue input tax credit (ITC). The Directorate General of GST Intelligence (DGGI) initiated the probe based on suspicion of widespread tax evasion through fraudulent means. Preliminary investigations suggest a complex network of shell companies created solely for the purpose of generating invoices without any actual supply of goods or services. This allows unscrupulous businesses to inflate their ITC and reduce their GST liability, causing significant revenue loss to the government. The seized cash and documents are currently being analyzed to determine the full extent of the fraud and identify all parties involved. Further investigation is underway, and more arrests are expected as the network unravels.
Section 132 of the CGST Act, 2017, outlines the penalties for offenses such as issuing invoices without supply of goods or services and fraudulently availing ITC. Such offenses can attract imprisonment for a term up to five years and a fine. Section 69 of the CGST Act empowers authorities to arrest individuals involved in offenses where the amount of tax evaded exceeds a specified threshold.
The use of shell companies to generate fake invoices is a growing concern for tax authorities. Businesses should implement robust due diligence procedures to verify the legitimacy of their suppliers and customers to avoid becoming unwittingly involved in fraudulent transactions. Taxpayers should proactively review their GST compliance to prevent potential scrutiny and penalties.
This crackdown highlights the government's increased vigilance against GST evasion and the potential for severe consequences for businesses engaging in fraudulent activities.