Minister assures probe into GST fraud allegations in Meghalaya

Correspondent

Shillong: Minister in-charge of Taxation Abu Taher Mondal on Thursday told the Assembly that the State GST Department is actively investigating fake firms operating within Meghalaya.

“I can assure the House that the State GST Department is actively investigating fake firms operating within Meghalaya that are engaged in passing on Input Tax Credit (ITC) to recipients located outside the state. The findings of such investigations are shared with the respective state authorities so that coordinated action can be taken against the fraudulent entities involved and proper action can be taken accordingly,” Mondal said while replying to a Zero Hour notice moved by VPP legislator from Nongkrem, Ardent M. Basaiawmoit, relating to reports alleging a Rs 500-crore GST fraud involving Meghalaya coke plants.

He said the State GST Department has formally written to the Directorate General of GST Intelligence (DGGI) requesting information so that necessary action can be initiated against recipients of bogus ITC under the state’s jurisdiction. “Fraud cases detected by agencies such as the Directorate General of GST Intelligence (DGGI) are regularly communicated to state authorities, and wherever such cases have been shared, appropriate action has been taken in accordance with the law,” he added.

The report alleged that on August 20, 2025, four individuals from Assam were arrested for their involvement in a fake billing scam, while another, Shiv Kumar Mittal, owner of GM Coke Plant in Byrnihat under Assam’s jurisdiction, was arrested for allegedly evading GST worth Rs 150-200 crore through similar schemes.

Mondal, however, said the DGGI has not yet disclosed details to the Meghalaya State GST Department regarding which coke plants in Meghalaya benefitted from such fraudulent schemes. He noted that since the National Green Tribunal banned rat-hole mining in 2014, legally sourced coal within Meghalaya has been limited, forcing coke plants to rely on district administration auctions and procurement from outside the state.

Explaining the process, Mondal said Input Tax Credit is a key feature of the GST framework, but verifying the genuineness of invoices remains a challenge. “State GST officers cannot cross-check the returns of taxpayers registered in other states. Fake invoices are typically issued to pass on bogus ITC, and they can only be established as fraudulent if the supplier is non-existent, if goods or services are not actually supplied, if taxes are not paid as declared, or if payment is made using bogus ITC,” Mondal said, adding that investigations of out-of-state suppliers fall under the jurisdiction of the DGGI.

He further informed that according to GST portal records, between 2022-23 and 2024–25, 29 coke plants were operational out of the 54 registered, with a cumulative turnover of Rs 307.06 crore and a total tax liability of Rs 18.75 crore, of which Rs 15.84 crore was discharged through ITC and the rest in cash. During the same period, these plants purchased 1,48,134 MT of coal from outside the state valued at Rs 72.49 crore, with IGST of Rs 24.57 crore.

Referring to the allegation, the minister said the report does not specify whether the fake invoice billing relates to the sale of coke by the plants or to the purchase of coal as raw material. However, since the shell companies involved are located outside Meghalaya, it is likely that the fraud pertains to coal purchases by coke plants in the state, he stated.

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