Chandigarh, January 28: The state Excise and Taxation Department is investigating a fake billing scam worth over Rs 100 crore, reportedly being run by some Ludhiana-based companies.
These companies — 12 of which are under investigation — have been allegedly involved in buying GST (Goods and Services Tax) bills from retailers of paints, cement, hardware, hand tools and iron and steel, at just four to six per cent of the GST charged on the items (on these items, GST charged is between 18-28 per cent). These bills are then being sold to exporters and large producers, who in turn are reportedly taking input tax credit by submitting these bills, when actually no sale of goods is taking place.
The exporters pay the amount mentioned in these bills to these unscrupulous companies through RTGS (real time gross settlement), which in turn withdraw the money from the account and pay them in cash. The investigation has shown cash withdrawals worth lakhs of rupees from the accounts of owners of these unscrupulous companies.
Officials in the Excise and Taxation Department have told The Tribune that though they have started investigation only in the last week and started conducting raids on the unscrupulous dealers and companies, they suspected that the scam was over Rs 100 crore.
Kumar Saurabh Raj, Additional Excise and Taxation Commissioner, who is heading the investigation, told The Tribune that though some of the kingpins of the scam were learnt to have fled the country, their investigation was on. “We are trying to ascertain if and how much input tax credit has been claimed by those involved. Raids have been conducted in Ludhiana and Mandi Gobindgarh and, if need be, details from some banks will be sought,” he said, adding that more unscrupulous companies could be involved in the scam.
Ludhiana-based businessman Badish Jindal, who was instrumental in bringing the scam to light, said customers of most of the above mentioned goods do not know that their price has the GST included in their maximum retail price (MRP).
“When customers ask for the bill, the retailer asks him to pay GST between 18-28 per cent. The customer refuses to take the bill as it increases his cost. These bills are then sold to unscrupulous companies, who pay just four to six per cent of the GST charged on the item. These bills are then sold to exporters at eight to nine percent of the GST. The unscrupulous companies get their commission (balance between the price at which the bill is bought from the retailer and sold to exporters) only after the tax is credited in the accounts of exporters,” he said. Jindal had reportedly complained to Punjab Chief Secretary Karan
Avtar Singh, who instructed the Excise and Taxation Department to start an investigation. Jindal said while the government was suffering a loss in the GST revenue collection, even the end consumer was not benefitting.
These bills are reportedly also being bought by those manufacturers who have to send their goods to other states. Since these bills carry a GSTN number and the E Way bill system has not yet been implemented, there was no check on these bills used in the transit of goods.
Sourced from tribuneindia.com
