Continuing the drive against the menace of fake invoices, the Officers of DGGI, Nagpur Zonal Unit, Nagpur swung back into field action with multiple searches at Nagpur after the Opening Up of businesses post Lockdown. Searches were conducted at the factory premises of a prominent manufacturer in the Iron and Steel sector and some of its suppliers on the basis of specific information that the manufacturer was availing fraudulent ITC on the strength of fake invoices from its suppliers without receipt of any goods.
During the course of these searches, incriminating documents, including mobile and computer data were seized. The modus operandi detected was that the manufacturer was receiving unaccounted scrap from various entities and to cover up these unaccounted transactions, it was sourcing Fake Tax invoices on which fraudulent ITC was being availed.
During the extensive investigations which involved detailed analysis of the transport documents like Lorry receipts, GR Notes, Weighment Slips, checking of vehicle details from the VAHAN Portal etc., it was revealed that a number of vehicles were passenger cars instead of designated Heavy Goods Vehicles used for transport. Further the documents towards payment of loading/unloading charges, proof of payments to transporters and toll payments were analysed helping to identify a large number of fake paper transactions.
On being confronted with these evidences, the manufacturer had no defence and has admitted to the availment of fraudulent ITC based on receipt of fake invoices without any corresponding receipt of goods from these suppliers and has voluntarily paid GST of Rs 1.81 Crores so far. The Proprietor of the main supplier of fake invoices has also been arrested on 10th June, 2021 on the basis of Arrest Authorization issued by the Additional Director General, DGGI, Nagpur Zonal Unit.
Further investigations are likely to reveal a huge nexus of fake transactions in a similar manner expected to be unearthed in the coming weeks.