GST fraud worth Rs 212 crore: Men obtain documents from poor people, get GST registration for dummy firms

GST Enforcement Authorities arrested two persons for GST fraud of Rs 212 crore in Odisha on Thursday, officials said.

The two men have opened fictitious and dummy firms in the name of persons belonging to the poor section of the society, PTI reports said.

According to the GST Commissioner Sushil Kumar Lohani said two persons identified as Amit Beriwal, and Subash Chandra Swain, a proprietor of two companies in Rourkela, have been arrested on the basis of their involvement in the GST fraud.

He also added that physical inspection and search of 27 business establishment recently followed by intensive data analysis, it was found that the duo fraudulently availed Rs 89 crore of bogus input tax credit and passing of input tax credit of Rs 123 crore on the strength of fake invoices.

The duo was arrested under the various sections of Odisha GST Act, 2017. The two men along with others have created as many as 28 fictitious and false firms in the name of poor people like daily wages labourers, unemployed youths, private tutors, and housewives.

These two fraudsters considered to be the mastermind and they have obtained the identity documents from the poor people and unemployed in the name of giving gainful employment.

Later, took GST registration and shown purchase of iron and steel goods worth Rs 493 crore and sale of Rs 687 crore in their names without payment of tax and passed on bogus input tax credit worth Rs 123 crore to recipients located both inside and outside the state of Odisha, the official said.

To hoodwink the department and legalize their fake transaction, the duo opened bank accounts and operated in the name of fake firms. A huge amount of cash transactions have been made through these fake accounts, the investigation told.

Meanwhile, an investigation has also revealed that many of the dummy firms are non-existent and not operating from their registered place of business. The possessors of the fake firms have also admitted that they are neither doing any business nor effecting any purchases/sales in the name of their firms.

GST Enforcement Authorities Lohani said that fraud involves revenue loss to Rs 123 crore.

The Commissionerate is taking steps to recover the bogus input tax credit availed by the recipients of Odisha with interest and penalty, he said.

Earlier in October 2019, two men also arrested for issuing fake GST invoices of around Rs 700 crore in Pune.

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