Even after two years of implementation of the Goods and Services Tax (GST), the government is struggling to plug leakages in the system. A probe by the GST authorities has revealed that nearly 1,200 exporters, who made GST refund claims of Rs 350 crore, were untraceable, the Times of India reported.
Citing sources, the daily said that over 800 entities have been prevented from exporting overvalued merchandise of Rs 1,500 crore to claim fake IGST with refunds over the last five months.
GST authorities also suspect the involvement of few custom brokers in these frauds, involving fictitious entities, existing only in virtual space, through identity thefts with fake and morphed documents. The role of 50-odd brokers is under the scanner as they were found to have dealt with exporters who are now untraceable. As part of the licensing conditions, the Central Board of Indirect Taxes and Customs (CBIC) has allowed these brokers to independently verify the KYC of exporters, the publication mentioned.
Initial scrutiny of the Integrated GST claims had revealed that eight star trading houses, which are entitled to several benefits, were also not traceable, prompting the revenue department to keep close tabs on these entities. Tax officials said that the entire exercise has been undertaken through the analysis of data, which is also shared with other government agencies including CBDT.
The publication citing sources said, newer modus operandi are now surfacing. An investigation related to a Delhi-based company revealed fraudulent refund claim of close to Rs 10 crore. The firm was ostensibly exporting readymade garments to a special economic zone. The taxpayer was selected for physical scrutiny and found non-existent at his declared address. It was also found that the owners of the firm were dummy persons.
Using a web of fake invoicing of over Rs 847 crore, the company is accused of creating a fraudulent tax credit of Rs 195 crore. Investigations showed that even the suppliers were untraceable. The documents showing deemed exports to the SEZ were also found to be fake.
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