Officials of the Commercial Tax Department, south zone, on Tuesday unearthed a tax evasion racket and booked 86 iron and steel and scrapdealers in and around Bengaluru using fake Input Tax Credit (ITC) facility.
A comprehensive probe carried out for the last two months to ascertain the goods and service tax (GST) revealed a complex web of fraudulent activities leading to the unravelling of a significant case involving ITC credit availment by a series of tax payers.
According to sources, the modus operandi of the accused was to avail ITC from dealers whose registrations have been suspended and cancelled by the department. In addition to this, the accused availed ITC from dealers whose business establishment premises do not even exist. The investigation further uncovered instances of availing ITC from dealers who had obtained registration through the submission of fraudulent documents intending to cheat the State revenue.
“The total turnover in this elaborate scheme amounts to ₹352 crore with fake ITC involved estimated at ₹64 crore. This revelation underscores the magnitude of tax evasion and the need for rigorous enforcement measures to protect the State’s revenue,” said Shikha C., Commissioner of Commercial Taxes.
“In this pursuit, the department is rigorously contemplating strong action against fake invoicing and tax evaders. Fake invoicing and tax evasion in GST is a punishable offence including fines, penalties, confiscation of goods, and attachment of properties and bank accounts,” Ms. Shikha said.
The department urged the public to remain vigilant and report any suspicious activities related to tax evasion.