Officials of the Central GST have unearthed an alleged tax fraud of Rs 224 crore and detected fake invoices worth Rs 1,289 crore by a group of eight companies involved in the trade of iron and steel products. A key suspect involved has been arrested and Rs 19.75 crore recovered from him. Several documents were recovered during the simultaneous searches conducted at the residential and business premises of these companies which have been generating fake invoices without actual supply of TMT bars, MS bars, MS flat products and passing on the input tax credit to other tax payers within the same group, besides some other taxpayers since July, 2017.
Five out of these taxpayers are operating from the same address and many of the Directors/Partners/Proprietors of these firms/companies,are common. According to officials, these companies were also found to be indulging in circular fake trading to inflate their turnover. Investigation also, prima facie, reveals that the above modus operandi is also being adopted to defraud the Banks for claiming ineligible credit facilities or Letters of Credit (LCs), without any collateral securities.
