GST invoice fraud: 132 arrested, 163,000 registrations cancelled

In its drive to check fake firms GST field formations have cancelled 163,042 registrations in the month of October and November this year due to non-filing of GSTR-3B returns for more than six months

In its drive to check fake firms, fly-by-night operators, and circular trading entities, the GST field formations have cancelled 1,63,042 registrations in the month of October and November this year due to non-filing of GSTR-3B returns for more than six months, sources in the Department of Revenue said.

In one month of its nationwide drive against GST fake invoice frauds, the Directorate General of GST Intelligence (DGGI) and CGST Commissionerates has so far arrested 132 persons including four chartered accountants and a woman for availing or passing on ineligible ITC fraudulently and have filed 1,430 cases against more than 4,586 fake GSTIN entities identified across the country.

Sources in the Department under the Finance Ministry said that the fourth chartered accountant, Akshay Jain, was arrested from Visakhapatnam for his involvement in issuing fake ITC (input tax credit) to the tune of Rs 20.97 crore on the invoices of cement by creating 14 fake firms without supply of goods. The investigation on the matter is still going on.

All these GSTIN entities who had not filed their GSTR-3B returns for more than six months were first issued cancellation notices and then their registrations were cancelled as per the standard operating procedure, the sources said. Also, out of 720 deemed registrations granted between August 21, 2020 to November 16, 2020 where Aadhaar authentication was not done, 55 deemed registrations have been identified for discrepancy and the process of cancellation was initiated in these cases as per the SOP issued earlier.

Sources said that further, 28,635 taxpayers who have not filed their GSTR-3B returns for more than 6 months as on December 1, 2020 have been identified and all the GST Commissionerates have been directed to initiate suo-moto cancellation process in these cases.

In Ahmedabad zone, a total of 11,048 GST registrations were cancelled and in Chennai GST & Central Excise Zone, 19,586 suo-moto cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.

Source: business-standard.com

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Frah Saeed

Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.