The Goods & Services Tax (GST) department has lodged a criminal offence against three persons for their alleged involvement in an Input Tax Credit fraud of Rs 43 crore. Input credit means at the time of paying tax on output, one can reduce the tax he/she has already paid on inputs and pay the balance amount. After the alleged fraud came to light, the GST department got a criminal offence registered against the trio with the Mahim police station on Monday, the officials said.
Those named in the First Information Report have been identified as SA Fernandes, NP Shinde, and PS Bhatt. The trio has been booked under sections 120B (Punishment of criminal conspiracy) and 420 (Cheating and dishonestly inducing delivery of property) of the Indian Penal Code and sections of Goods and Services Tax Act for evading tax, or fraudulently obtaining a refund and falsifying or substituting financial records or producing fake accounts or documents or furnishing any false information with an intention to evade payment of tax due under this Act.
According to GST officials, in November 2019, following scrutiny from the GST department, it was revealed that the accused persons had allegedly misused GST registration documents and entered into a criminal conspiracy in order to commit Input Tax fraud. "Our probe has revealed that between the period of August 2017 till November 2019, procured GST registration documents of two firms identified as NS Multitrade and M/s Augusta Tradecom & Exim Pvt Ltd. The trio had allegedly defrauded on the Input Tax Credit of Rs 36.70 crores in the name of M/s Augusta Tradecom & Exim Pvt Ltd and Rs 7.15 crores in the name of NS Multitrade," said a GST official.
"Statements of Fernandes and Shinde were recorded by the GST officials and the duo claimed that their documents were misused by Bhatt to get GST registration of both the companies done in order to commit alleged fraud. The duo also claimed that Bhatt used to pay them Rs 10000 a month for having used their documents in the said fraud. We have just registered an offence and in the matter and will record statements of all those who have been named in the case," the official said.