Central GST’s Surat unit busted a tax evasion racket of a scrap trader who purchased scrap from local traders without mandatory billing or even paying GST. Later, the trader was found to be putting up fake bills to claim GST refund.
CGST sleuths arrested Rameshchandra Tulsidar Agarwal, owner of the scrap trading unit, Ms. Manish Scrap Traders and booked him under various sections of CGST Act 2017. CGST traced the accused unit of availing input tax credit from several shell firms. During investigation, tax evasion of around Rs 6 crore was detected in multiple transactions recorded in the past one and half years.
The firm availed ITC from One Ten Steel, Prime Metals, Magnus Metals, Crystal Metals, R J Traders, Decent Steel and Global Traders. “Investigation found these firms to be shell cos used for putting up bogus bills and claiming that GST has already been paid while purchasing scrap from these firms,” said a CGST officer.
CGST office collected information about the racket through field investigation and detailed data analysis of various transactions of the firm. Acting on the intelligence, Manish Scrap Traders was inspected on Thursday. “During recording of the statement of its owner Agarwal accepted to have availed ITC of Rs 5.98 crore from the firms which was fraudulent in nature,” the official added.
CGST’s Surat unit has cracked down on multiple rackets of fake invoices in order to end the menace. In the last 2 years, 15 persons have been arrested who are involved in a fake invoice racket.