Rs 200 cr bogus transaction scam exposed

Indore: This is Sachhe Din where a group of people huddled to create a “conglomerate” of sorts to hoodwink the government and usurp money to make Achhe Din for themselves. The joint action team officials of Central and Service Tax (CGST) and State Goods and Service Tax (SGST) have succeeded in exposing one of the “biggest” scam worth approximately Rs 200 crore involving bogus transaction that in turn “minted” to the tune of Rs 25 crore in the form of Input Tax Credit (ITC) on Friday.

The perpetrators of the scam had created shell companies with the help of documents of cobblers, auto drivers and tailors, to realize the ITC in fake iron-steel trade. Indore has emerged as the epicenter of the scam, as out of 32 premises of the across the country, 17 locations that were searched came under CGST Commissionerate Indore.

Two premises fell under Jabalpur and 1 under Bhopal Commissionerate. Besides the state, 5 premises were zeroed in at Bhavnagar, 5 in Thane and 2 in Mumbai (West) Commissionerate. Modus Operandi: These bogus companies made a transaction of 200 crore after which they submitted invoices and claimed a total ITC worth Rs 25 crore. Following the bulk of companies, this amount would have been astronomical.

This is how the “conglomerate” minted money without actually making NO transaction in real terms. The alert department officials, noticed the flaw in the whole process that the “conglomerate” was claiming money but was filing GST returns! Following this, the department officials decided to swoop in on the “directors” and “honchos” of the company.

“Mr Cobbler and Ms Tailor’s documents used The search action revealed that all the dealers’ premises were non-existent and no business activities were being undertaken from there. In most of the cases, the owners of respective premises were found to be ignorant of the activities. The address proof was obtained by the perpetrators of the crime.

Most of these “directors” and company “honchos” were actually people who lived Below the Poverty Line and were actually engaged as cobblers, tailors and auto drivers in real life. It has also been revealed that such firms were generating bogus E-way bills, maintaining movement of goods worth crores of rupee, which Actually never took place! The data mining revealed that many such “firms” were fake and did not file GST returns or filing returns not commensurate with the inward/outward details gathered through E-way bill system. 20 dealers included in action

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