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Country's biggest-ever GST fraud worth Rs 60 crore unearthed in Kanpur

Two Kanpur businessmen did fraudulent activity for a year.

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A year after introduction, country’s biggest-ever GST fraud and evasion was unearthed by the intelligence unit in Kanpur where two prominent businessmen faked purchase and sale invoices worth Rs 400 crores to evade and pocket Rs 60 core Input Tax Credit (ITC) fraudulently.

A team of the GST Intelligence unit, led by deputy director Kamlesh Kumar, raided offices of two prominent traders in Kanpur Manoj Kumar Jain and Chandra Prakash Tayal. During the raid, the team recovered fake purchase-Sale bills / invoices and vouchers worth Rs 400 crores from the offices of the two traders.

The recovered bills showed that two businessmen purchased goods worth Rs 400 crores and supplied them through fake E-way invoices / bills in the last one year. They would offer fake challans to fake buyers for giving them input tax credit (ITC).

The GST intelligence sleuth got suspicious after checking their annual GST return which showed that they traded goods worth Rs 400 and sold to buyers to claim ITC worth Rs 60 crore. “After scanning their records, we were shocked to find that they were doing all purchase and sale on papers only through fake billings to seek GST benefits through the ITC,” said Rajendra Singh, Director General GST Intelligence.

Firms of Jain and Tayal showed fake e-way bills from purchasers and transporters and were making payments through RTGS to bring the sale and purchase on record. Later, they would take back the money from the creditors’ after giving them the commission for parking the transacted money in their accounts.

The DG GST Intelligence claimed that after a year of GST implementation, it was country’s biggest-ever GST fraud and evasion involving over Rs 60 crore. “Investigations are on and the fraud amount may go up further,” claimed he.

Once the investigations are over, the GST state unit will slap recovery notices on the two businessmen. The Union Finance Ministry has also sought a detailed report from the DG GST Intelligence to study the modus operandi adopted by the two Kanpur traders in committing the fraud and evasion in order to plug the loopholes in GST implementation.

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