Directorate to contest bail for accused who evaded taxes based on forged invoices
Mumbai: The Directorate General of Goods and Services Tax Intelligence (DGGSTI) is estimating the latest alleged service tax and goods and services (GST) fraud in city to cross over ₹300 crore, making it one of the biggest evasion cases in recent history.
Sources said the intelligence agency has decided to contest the bail application of the director of Horizon Outsource Solutions Private Limited, Amit Upadhyaya, and Asad Anwar Sayed of Best Computer Solutions Private Limited, who jointly carried out the ₹173-crore alleged service tax and GST evasion based on forged invoices of as many as 10 services related to outsourcing and information technology which were never provided in the first place.
Horizon was working in the field of manpower outsourcing and accounting. “Once the investigations are complete, we expect the total evasion to reach ₹300 crore and more. We don’t expect them to go scot-free since it is a one-of-its kind case. The invoices were not only generated on services never provided but they were even printed,” sources in the DGGSTI said.
Both Upadhyaya and Sayed were arrested last week under Sections 89 and 69 of theCGST Act, 2017. The two have been remanded to judicial custody till June 2 and charged with offences under Section 132 (1) — supply of goods or services without issue of invoices; issue invoice without supply of goods; avail of input tax using bogus invoice; collection of tax but failure to pay the government beyond three months from the date on which such payment becomes due.
According to officials, between April 1, 2016 and June 2017, Horizon took GST credit of ₹79.38 crore on the basis of fake invoices from Best Computer Solutions, which was publishing and printing the invoices internally. Horizon also collected service tax of Rs. 46 crore, while issuing bogus invoices to show GST of ₹47 crore towards his clients. The total fraud amount to ₹173 crore, officials said.
Sources said the fraud was made possible since the new regime is still not integratedfully with an invoice matching mechanism. The invoice matching is only possible when both the buyer and supplier are tightly integrated through an information system. “The GSTN is yet to fully integrate the taxation platform in this regard,” a source said.