At a time when tax regulation bodies around the country are cracking down on fake GST invoice rackets, the latest one facing the law has its roots in Odisha.
The new year began on a good note for Odisha Goods and Services Tax Enforcement Wing as the tax regulation body cracked a GST invoice scam worth Rs 510.28 crore in Cuttack. The kingpin of the fraudulent racket has been found and taken into police custody but his accomplices are fugitives for now.
The regulation body is trying to track the other accused in the racket. Three goods-carrying vehicles acquired with the money made by kingpin Sandeep Mohanty through this racket have also been seized by the tax enforcement wing at Jeypore in Koraput, Odisha.
Mohanty is accused of defrauding the government of Input Tax Credit (ITC) worth Rs 27.21 crore by planning a racket with others. The racket raised fake purchase invoices worth Rs 166 crore which were issued against 22 fake companies that were registered under his ownership.
Mohanty is said to have achieved ITC worth Rs 61.79 crores based on Rs 344 crore worth of fake GST invoices raised against fake goods purchases with bills issued to recipients to Odisha as well as outside. Even though the GST fake invoice racket had been active for a short span of time and Mohanty along with his accomplices had gathered considerable amount of ITC during this time.
The Odisha Goods and Services Tax Enforcement Wing has been lauded for the efficiency and precision with which it has detected and uprooted the fake GST invoice racket that was cheating the government of taxes worth in crores.
According to top government officials, the financial loss to the state government would have been massive in scale had the racket not been busted in its early phase. Such rackets in the state are not new, though, as the Odisha Goods and Services Tax Enforcement Wing has until now busted several tax fraud rackets and arrested some 17 fraudulent individuals who had been defrauding the state government of valuable taxes that should legally have gone to the state coffers.
The total worth of fake GST invoices issued against such rackets has been found to be Rs 5,210 crores so far, with an illegal ITC worth Rs 970 crores accumulated by the fraudsters. The state GST enforcement wing has been strict in its action against GST fraudsters by cancelling nearly 19,539 dealer registrations during the last two financial years after an in-depth enquiry into their business entities’ legitimacy.
Other states of the country have also seen instances of such GST frauds with major fraud rackets caught in Mumbai and Delhi last year.
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