Tax sleuths have uncovered a massive GST scam operating from an inconspicuous 10x10sqft shop in the narrow lanes of Khandsa village merely 12km from the city centre. The operation generated fake invoices worth Rs 97 crore for tobacco products and soft drinks, and fraudulently claimed input tax credits of Rs 66.6 crore.
The mastermind behind the scheme was found to be a former property dealer — Ashim Kumar (50) — who had transformed his modest shop into the epicentre of the tax evasion network. He was arrested on February 21.
Kumar, officials said, registered a fictitious company at the shop’s address in Khandsa, and claimed to deal in high-tax FMCG products. Cigarettes, which attract a staggering 108% tax, including central GST and cess, and soft drinks with their 40% tax burden, were the primary focus of this fraudulent operation.
The veil was lifted off the scam when tax officials noticed an unusually high volume of trade emanating from a tiny establishment within a short period. A team from the central GST commissionerate in the city visited the address used to register the fake companies and discovered a shop that maintained minimal inventory and served primarily as a front for paper trading.
“Our data analytics used GST Prime and e-way bill systems to track the syndicate of bogus firms engaged in paper trading of FMCG products without any actual supply of goods. The detailed analysis led us to the mastermind, who had orchestrated this entire operation from his modest shop,” said Karan Singh, ACP (CGST).
According to Singh, the scope of investigation will be expanded to examine several traders and businessmen in New Delhi who might be connected to this fraudulent network.
Kumar, who was picked up on Friday, was remanded in judicial custody till March 5 after being produced in court. He faces charges under various provisions of the GST Act, 2017.
Singh admitted there was a growing sophistication of tax fraud in the country that enforcement agencies were finding it challenging to tackle.
“What makes this case particularly concerning is how a small retail space was being used to perpetrate such a massive fraud. It portrays the need for continued vigilance and advanced detection methods in our tax administration system,” he added.
Officials said more revelations were expected as the probe progressed and delved deeper into the network of companies involved in tax evasion.
Source #TOI
