Cases of deliberate non-payment, prolonging payment cycle, misuse of GST numbers rampant; Maskati Mahajan urges victims to register cases to prevent recurrence
Frauds related to non-payment of dues of about Rs 1,000 crore is hurting the local textile market, say market leaders. These relate to bouncing of cheques, misuse of GST numbers, deliberate non-payment and even extension of payment cycles to about six months. However, Maskati Market Kapad Mahajan, which arbitrates in trade disputes, said that most of the cases do not come on record and so culprits are mostly not identified resulting in repetition of frauds.
Gaurang Bhagat, president of Maskati Market Kapad Mahajan, said that cases of cheques not being honoured have been rampant over the past two and a half years resulting in accumulated frauds worth Rs 1,000 crore. "These estimates were arrived at when traders began opening up. Despite the Mahajan intervening to solve disputes, only about one per cent of cases come on record and the count of victims continue to rise," said Bhagat.
The owner of a processing firm in Ahmedabad said that it had supplied goods worth Rs 12.5 lakh to a firm about two months ago but the buyer is unwilling to pay. He has registered his complaint with the Mahajan. "The buyer came with the reference of a reputed trader and paid for goods worth Rs 2.5 lakh. After that he bought goods worth Rs 7.5 lakh and Rs 5 lakh in quick succession and is now not honouring the commitment," said the businessman.
Bhagat said that despite being duped, sellers give reference of buyers in the hope that the latter will pay back, but in the process, other traders get duped too. Bhagat warned sellers to supply goods to unauthenticated buyers coming through the reference of other traders. "If the sellers want to know the credentials of any buyer, they should approach the Mahajan. We will give the right guidance," he said.
The segment of salwaar-kameez and kurtis is the worst affected with estimated frauds worth at least Rs 500 crore. "Close to 2,000 traders in the sector have been at the receiving end. The frauds in denim, shirting, cotton suiting, other dress material and bed sheets are not that rampant," said Bhagat.
OVER 400 COMPLAINTS RECEIVED IN 18 MONTHS
Maskati Mahajan, as it is popularly called, received over 400 disputes in past 18 months, of which 125 are still pending. Bhagat said that another 800 cases have been settled in an informal manner. The Mahajan has got the authority to arbitrate in disputes between traders. It has blacklisted over 100 traders and has urged traders to bring on record the fraud cases so more fraudulent traders can be identified.
Traditionally, textile trading is on credit, with credit cycle being 15-60 days. Even if there is a delay in payment, traders hope that payment will be made and do not register a formal complaint. Bhagat said that in spite of the fact that Goods and Services Tax (GST) has brought formalisation in trade, such frauds continue. "There are numerous cases of misuse of GST number, with the rightful owner not even aware of the misuse," he informed.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Textile trade")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}