GUWAHATI: The Directorate General of GST Intelligence (DGGI), Guwahati, has uncovered a significant tax evasion scheme involving fraudulent invoicing worth Rs 70 crore.
The investigation, led by the DGGI, revealed a network of firms issuing fake invoices to fraudulently claim Input Tax Credit (ITC).
The investigation led to the arrest of Natwar Kumar Jalan, a partner at M/s Yash Associates firm based on Kedar Road, Guwahati. Jalan allegedly used fake ITC amounting to Rs10 crore based on fabricated transactions. This allegedly involved the issuance of bogous invoices by at least dozen suspicious firms, which itself was part of a broader scam.
Jalan was produced before the Judicial Magistrate, where his bail plea was rejected. The court put him under judicial custody for 14 days, marking a critical step in the investigation.
The racket revolved around fake invoicing practices. Businesses involved in this scam prepare false invoices without the actual supply of goods or services. Those invoices are then used to claim ITC, which offsets the GST liability of such business houses. Doing so allows companies like M/s Yash Associates to reduce their tax outgo fraudulently with huge losses to the exchequer.
In this case, the network of fake firms collectively issued fake invoices worth ₹70 crore. According to sources, these firms existed only on paper and were a conduit for illegal ITC claims. This makes it one of the biggest tax fraud cases reported in the region.
The DGGI confirmed that this is just the tip of the iceberg, and with Jalan's arrest, the probe into the network behind this entire scheme has intensified. Authorities indicate that more arrests are due in the coming days as they work to dismantle the infrastructure that enables such fraudulent activities.
Tax evasion through claims of false ITC was a long-standing challenge before tax authorities, and with this, revenue collection suffered and compliance was undermined. The arrest of Jalan also brings out the fact that the government is committed to tackling GST fraud.
With increased analytics and technology, enforcement authorities have been able to detect fraudulent activities and check the wrongdoing, ensuring businesses comply with GST laws in the best possible manner.
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