Officers of the Directorate-General of GST Intelligence (DGGI), Belagavi Zonal Unit, have uncovered a major violation of GST rules and tax evasion.
During an inspection of a scrap metal dealer in Harihar of Davangere district, a team of officers found fake invoices valued at approximately ₹112 crore resulting in fraudulent availment and utilization of Input Tax Credit (ITC) amounting to ₹17.14 crore.
Investigators confronted the accused Mohammad Saqlain of Mariyam Scrap Dealers with evidence collected by the department. He admitted to fraudulent availment of ITC on the strength of fake bills.
He also acknowledged short payment of GST under the Reverse Charge Mechanism (RCM) amounting to ₹4.50 crore, taking the total GST evasion to ₹21.64 crore.
Preliminary findings revealed that the taxpayer has largely procured metal scrap from unregistered suppliers wherein ITC is not available.
Additionally, most of the purchases of the firm from registered entities were found to be from non-existent or fictitious entities. Mariyam Scrap Dealers layered genuine purchases from unregistered dealers with bogus ITC obtained from fictitious entities, thereby facilitating fraudulent credit flow and evasion of GST.
The investigation revealed the use of forged documents to obtain bogus GST registrations, with an intent to issue fake invoices for commission.
The accused was arrested on October 17 under Section 69 of the CGST Act 2017 by DGGI Belagavi Zonal Unit and produced before a JMFC Court, Belagavi, wherein he was remanded to 14 days of judicial custody.
Further investigation is on, according to a release.
