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GST invoice scam: Now, Delhi iron firm owner arrested

The scam is spread across Punjab and Delhi.The accused was operating through different fake companies and names.

punjab Updated: Jul 05, 2018 12:13 IST
Aneesha Sareen Kumar
Aneesha Sareen Kumar
Hindustan Times, Ludhiana
GST,GST invoice scam,Goods and Services Tax
The accused in the custody of directorate general of GST Intelligence on Wednesday.(HT Photo)

A day after a Mandi Gobindgarh-based steel mill owner was held for forging Rs 125-crore invoices to evade Goods and Services Tax (GST), the Directorate General of GST Intelligence (DGGI) on Wednesday arrested the proprietor of another firm in connection with the case.

The accused, Jatinder Munero (32), the proprietor of Pingashk Enterprises, a Delhi-based firm that deals in iron, was arrested in Mandi Gobindgarh.

The GST investigation wing on Tuesday had arrested Sammy Dhiman, owner of PK Dhiman Steel and Vardhman Steel, for making fake invoices and supplying items on CENVAT (central value added tax) credit to furnace owners. The CENVAT scheme allows manufacturers to adjust taxes paid on the inputs used while manufacturing the final products.

“Sammy and Jatinder were involved in the sale and purchase of goods from each other’s companies (besides other firms) and preparing counterfeit bills. They (the companies) were only exchanging invoices for so-called sale and purchase. They were raising invoices only on paper, but no actual sale or purchase of goods took place,” said DGGI deputy director Rachna Singh.

“He (Jatinder) has been under our scanner for the last four to five months. The scam is spread across Punjab and Delhi and the accused was operating through different fake companies and names. The scam is pegged at Rs 138 crore as of now and still counting,” said Rachna Singh, adding that more arrests are expected in the coming days.

She said the operation was supervised by DGGI additional director Nitin Saini and it has come to light that there are many others who are involved in such scams.

Both Jatinder and Sammy were produced in the court of chief judicial magistrate Suresh Kumar Goyal in Ludhiana and were sent to 14-day judicial custody. They will now be produced in the court on July 18.

Modus operandi

In all these cases, the modus operandi is almost same as fake invoices are issued for sale and purchase that never takes place, officials said. Traders buy fake bills which enable them to claim input tax credit on the supply which never happened. Input tax credit is an option in GST which allows the taxpayers to claim credit for the taxes paid on purchase.

Misuse of input tax credit is a serious concern for the tax authorities as it seems to have created a hole in the system that the enforcement agencies are struggling to fix.

First Published: Jul 05, 2018 12:12 IST