GST officers unearth over Rs 35,000 crore fraud in 2020-21, arrest 426 persons

The GST officials have found over Rs 35,000 crore of tax fraud committed by misusing the input tax credit provided under the Goods and Services Tax (GST) system during a year-long crackdown on tax cheating. The CGST zones and the Directorate General of GST Intelligence (DGGI) booked around 8,000 instances involving false ITC NSE 1.11 per cent of over Rs 35,000 crore during the 2020-21 financial year, according to a CBIC release.

Entities can decrease the tax they have already paid on inputs when paying tax on output under the GST regime.

However, some have taken advantage of the provision by fabricating phoney invoices for inputs.

“The most common mode of evasion under the GST law is the misuse of the benefit provision of ITC,” according to the statement.

“From the very beginning of the GST regime, the Central Board of Indirect Taxes and Customs (CBIC) field formations have been regularly finding such incidents.”

During the 2020-21 fiscal year (April 2020 to March 2021), 426 people were arrested, including 14 professionals such as accountants, lawyers, and directors.

[pt_view id=”c8bb8e9z6d”]

“With effect from November 9, 2020, a statewide special drive against the false GST invoice was initiated, which is still ongoing,” it added, citing the high percentage of fake ITC availment and use.

“However, due to the serious Covid pandemic spread over the last two to three months and related safety concerns, the driver slowed down,” the statement said. “However, with the gradual lifting of lockdown and improved Covid-19 situation in various parts of the country, the department has resumed the drive-in coordinated action at the national level,” it added.

gst

During this month, the Directorate General of GST Intelligence and all Central GST formations intensified their crackdown on fraudsters who are causing the government exchequer to lose money.

During the current financial year, the Directorate General of GST Intelligence and CGST Zones under CBIC has detected over 500 cases involving 1,200 businesses and arrested 24 people as part of the nationwide drive.

The number of arrests made by CBIC police is one of the greatest in recent memory, according to the statement.

To catch the fraudsters, CBIC officials are employing the most up-to-date IT technologies, digital proof, and information from other government offices.

GST’s Applicability to the Reverse Charge Mechanism for Service Imports

In another case, the CGST Ahmedabad Zone filed an ITC fraud case worth Rs 38 crore against thirteen phoney organisations that were set up to pass on fraudulent ITC by submitting counterfeit iron and steel invoices.

“The enforcement drive against phoney invoice fraudsters and other GST evaders is anticipated to intensify,” the statement stated, adding that the goal is to “identify and book unscrupulous people involved in illicit operations to cheat the government exchequer.”