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Crackdown on GST fraud in Gujarat

Several arrests in Ahmedabad, Surat and Unjha, which have become hubs for large-scale tax evasions in the State

Goods and Service Tax (GST) authorities of the Centre and the State in Gujarat have launched an extensive exercise to bust GST fraud involving fake invoices to claim input tax credit. The authorities have arrested several people from Ahmedabad, Surat and Unjha, which have become hubs for large-scale tax evasions in the State.

On Tuesday, the Central GST team of the North Commissionerate, following a tip-off, raided the premises of Bharat Soni and found evidence that he used fake bills for ₹2,435.96 crore to claim ₹72 crore input tax credit on GST paid on the bills. Soni was arrested and sent to 14 days remand.

Tax authorities have found that the jeweller created six different companies in the names of his family members to execute the scam.

“The investigation conducted by the department revealed that several other persons involved in this chain of coordinated syndicate of swindlers who have supplied or received fake tax invoices by rotating or layering the chain of fictitious transactions of sales and purchase including banking transactions,” stated in a release issued by the central GST office in Ahmedabad.

Preliminary estimates suggest the value of fake invoices issued by various members of the syndicate is pegged around ₹7,250 crore involving fraudulent input tax credit of ₹210 crore.

In Rajkot, too, the Central GST team busted a major scam of fake invoices worth ₹285 crore and arrested one Chirag Raiyani, 26, from Gondal on Thursday.

Similarly, the State GST authorities arrested five persons in connection with alleged tax evasion of ₹6.5 crore in spices hub Unjha, where Agricultural Produce Market Committee (APMC) Director Sanjay Patel generated e-way bills worth ₹109.97 crore in the names of drivers, peons and sweepers of the APMC.

In another arrest, the State GST wing took into custody one Umang Patel from Surat who allegedly issued fake invoices of building material supplies worth ₹219 crore.

“We have become very strict now and started plugging all loopholes which are used by some elements to evade paying taxes or to fraudulently claim input tax credit,” a senior official told The Hindu. The official added that the authorities have enhanced surveillance to detect fake invoices through on-paper transactions in major trade and business centres in the State.

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