E-Paper
ITC fraud: Cybercrime cell exposes ₹215 crore racket, one held from Lucknow
The UP police cybercrime team claimed to have unravelled a ₹215 crore ITC (Input Tax Credit) fraud, with the arrest of one Sanjay Singh Yadav, 30, from Lucknow, on Thursday The fraud was committed by generating fake invoices and E-way bills in the name of bogus companies formed by him for this specific purpose
The UP police cybercrime team claimed to have unravelled a ₹215 crore ITC (Input Tax Credit) fraud, with the arrest of one Sanjay Singh Yadav, 30, from Lucknow, on Thursday
The fraud was committed by generating fake invoices and E-way bills in the name of bogus companies formed by him for this specific purpose.
Police officials said that the accused is associated with the same nexus in which the Goods and Services Tax (GST) department has exposed the ₹1700 crore ITC fraud in the name of 650 bogus firms of Meerut in January, 2021.
Input tax credit (ITC) is available for manufacturers and dealers. These taxpayers are entitled to tax credit on inputs purchased through the course of manufacture. Similarly, a trader will receive input tax credit on goods purchased for the purpose of reselling. The tax credits are available on capital goods purchases made within the state, and only those goods that are involved in the processing or manufacture are applicable under this credit. This tax credit is state-specific.
If the final product is sold outside the state of manufacture, the input tax credit has to be reversed to authorities. Also, if the final product has tax exemptions, the input tax credit will not be applicable. The tax credit is usually spread over a period of three years; however, rules vary according to individual states.
Superintendent of police (SP), cybercrime, Triveni Singh said that the nexus was unearthed while investigating a case registered by one Azim Iqbal Khan at the PGI police station of Lucknow in October 9, 2020 and another case by one Vishal Kashyap at the Aminabad police station of Lucknow in August 10, 2019. He said both cases were related to tax evasion through fake invoices and E-way bills without actual supply of goods and passing on the said fraudulent input tax credit (ITC) to other firms after circulation of invoices through other non-existing firms in return for some money.
He said the accused have been booked under relevant sections of the GST Act and produced before a court in Lucknow.
The SP said that the accused, who was in some small-time business, had started companies where no physical movement of goods used to take place but fake invoices were released against which input tax credit was availed. He said the cyber-crime team found incriminating documents including details related to 37 bank accounts of a bogus firm during the search conducted on his premises in UP and Delhi. He said transactions amounting to ₹ 215 crore were found from these bank accounts and the accused failed to give any details about where he received this money from.
The SP said that the modus operandi involved circulation of fake ITC through a chain of non-existent firms by registering them at non-existing addresses. He said these firms were subsequently used to issue fake invoices and ITC passed on to existing firms for further utilisation in the payment of GST and goods transportation from one place to another. “The investigations are still on and more revelations will be made in the future,” said Singh.
The SP said the accused had formed one company titled Importy Sale in the name of his wife and owns a store in Delhi. He said the accused owns a flat in Delhi and a house in Lucknow and one house in Unnao.
