Bizman held in Rs 119-cr GST fraud

The state Goods and Service Tax (GST) department on Wednesday arrested a man for allegedly opening four firms on forged documents, issuing bogus invoices of Rs 119 crore and passing fake Input Tax Credit (ITC) of Rs 9 crore to various buyers.

The ITC is an option in the GST which allows the taxpayers to claim credit for the taxes paid on the purchase. According to the department, the name of arrested person is Yogesh Jagdish Prasad Kanodia who operated four firms–Yash Fabrics, Shree Ganesh Textile, JK Fabrics and Krishnansh Enterprises.

This is a follow up action after the agency arrested one Dilip Tibrewal in a multi-crore ITC scam. “These four firms are registered under the Maharashtra Goods and Service Tax Act, 2017 and are operated by Kanodia. It is found that the GST registrations of all these four firms have been taken using forged documents. It is also found that these four firms have shown purchases of Rs 175 crore from 22 different companies operated by Tibrewal, who has already been arrested on the charge of issuing bogus sales invoices and there by passing fake ITC to various buyers,” the agency stated on Wednesday.

Further, these four firms have shown sales of Rs 185 crore to various entities. However, it has been found that sales invoices worth Rs 119 crore have been issued without any underlying movement of goods, and thus the corresponding ITC of Rs 9 crore has been wrongly passed on to various entities.

These amounts are likely to increase as the investigation is still underway, the agency said. According to the department, these acts of Kanodia constitute an offence under relevant section of the Maharashtra Goods and Services Tax Act 2017, and are cognizable and non-bailable offence. The offence is punishable with imprisonment of minimum of 6 months, and up to 5 years.

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