On the basis of specific information regarding the operation of a massive Fake invoice racket, simultaneous searches were conducted by the officers of DGGI, Nagpur Zonal Unit ata number ofplacesatNagpur.Based on the documents unearthed during these searches, subsequent searches were conducted at Jalandhar, Sonepat and New Delhi.
During the investigations and on interrogation of the authorized persons, it was revealed that a number of Entities across India, from Tamil Nadu to New Delhi, were involved in issuance of Fake Invoices and availment of fraudulent Input Tax Credit, without supply of any goods. They were engaged only in paper transactions of goods ranging from Iron & Steel products, Insulated Wires, Plastic Articles to Copper/Aluminium waste & scrap, in order to avail and pass on fraudulent Input Tax Credit.
The investigations revealed that the declared places of businesses of these entities were residences and the supporting documents uploaded by these entities had been forged. The modus operandi adopted by these entities was to obtain GST registrations on the basis of documents of unrelated individuals and carry out bogus transactions.The entire transactions were carried out only on paper without any actual physical movement of goods. These transactions were routed systematically through this network to make the source as untraceable as possible. The entities deliberately capped the GST involved in the transactions of a single GSTIN below Rs 5 Crores to prevent stringent action.
The seentities systematically cancelled or stopped using the GSTINs before reaching the threshold limit of Rs 5 Crores and obtained new GSTINs using the details of other persons by forming new Partnership firms and using the PANsof the new firms to continue their illegitimate activities. The scrutiny of e-way bills generated by these entities also revealed that the vehicles mentioned in the e-way bills generated by these GSTINs were found to be belonging to the class of vehicles such as two-wheelers and three-wheelers incapable of carrying out the transportation activities as mentioned inthe e-way bills.
The results of the investigations carried out so far are as under:
(i).Number of entities involved in this racket =23 firms located across India from Tamil Nadu to New Delhi, including 6 Nagpur based firms.
(ii).Places at which searches were conducted =Nagpur (Maharashtra), Jalandhar (Punjab), Sonepat (Haryana) and New Delhi
(iii).Value of fake transactionsusing fake invoices =Rs. 434Crore
(iv).Fraudulent Input Tax Credit availed =Rs. 78.13Crore
