E-Paper
129 bogus dealers fraudulently claiming input tax credit under GST found in UP
These dealers together have already received ITC worth around ₹64 crore while bills for ITC claims of nearly ₹16 crore are under process during the current financial year
LUCKNOW As many as 129 bogus dealers claiming input tax credit (ITC) fraudulently without receiving any supplies for sale have been found in Uttar Pradesh during the ongoing pan-India drive against fake GST registrations that is nearing conclusion, officials said.
These dealers together have already received ITC worth around ₹64 crore while bills for ITC claims of nearly ₹16 crore are under process during the current financial year. The state tax department has moved to cancel all the fake GST registrations found so far, make recovery of ITC claimed fraudulently, besides blocking the under-process payment of the ITC of ₹15.62 crore.
“We have verified 6,302 of the 6,137 suspected dealers and 129 of them have been found to be bogus during the current two-month all-India drive that will be ending on July 15,” said joint commissioner (GST) Hari Lal Prajapati.
“Necessary action, including recovery of ITC, is being taken against all the bogus dealers,” he added.
The Central government had forwarded the state tax department a list of 6,195 suspected dealers in UP while another 122 dealers had been on the radar of the department. After verification, the highest number of bogus dealers has been found in the Ghaziabad zone (52), followed by Meerut zone (12) and Varanasi zone (11).
“The total number of bogus dealers found may be just 2% of the suspected ones and this number may be lower in UP compared to many other states because UP keeps identifying and weeding out bogus dealers,” Prajapati pointed out.
The Central and the state tax departments had launched a two-month special all-India drive from May 16 to detect suspicious/fake registrations under GST and weed out fake billers from the GST eco-system and safeguard government revenue.
A circular issued by state tax commissioner Ministhy S before the launch of the drive stated that fake registrations were being used to fraudulently pass on input tax credit (ITC) to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both.
“This menace of fake registration and issuance of bogus invoices for passing of fake ITC has become a serious problem, causing revenue loss to the government,” the circular pointed out.
According to Prajapati, many fraudsters obtain fake GST registration (GSTN) using other people’s identity like PAN and Aadhar number besides also forging documents such as electricity bills, rent agreement etc as proof of principal place of business.
“These bogus dealers receive goods/services from any other dealer or manufacturer but issue bills to them enabling the latter to illegally claim input tax credit from the department,” he revealed.
“Suppose you are a manufacturer and tax payable on the final product (output) is ₹500 and tax paid on the input (purchase) is ₹200. In such a case, you can claim input credit of ₹200, and you only need to pay ₹300 as tax,” explained another official.
