Recently, Gurugram Zonal Unit of Directorate General of GST Intelligence arrested one Ravinder Kumar in connection with input tax credit (ITC) fraud worth Rs 43 crore. This is not a lone example, but Haryana has the fourth-highest cases in GST Fraud from July 2017 to December 2020. As many as 3,852 fraud cases were unearthed across the country during this period. Maharashtra topped the list with 668 cases followed by Tamil Nadu (652), West Bengal (370), and Haryana (303), according to data tabled in the Lok Sabha by the Finance Ministry.
Tax officials said the use of fake invoices to avail ITC credit had been increasing and it was a cause for concern, especially at a time when revenue collection was depressed.
Quantum of GST Fraud in Haryana
In terms of quantum of fraud, Haryana is at number three. Frauds worth Rs 4,489.90 crore were detected in Haryana between July 2017 and December 2020. In total, Rs 35,620.40 crore of ITC fraud was detected across the country during the period. Delhi topped the list with fraud worth Rs 7,922 crore followed by Maharashtra (Rs 7,147.50 crore). The modus operandi, according to the department, is setting up fake companies, creating fake invoices, and collecting illegal input tax credit.
In many such cases, officials found that GST registrations have been made by misusing the KYC documents of other persons. A number of fictitious companies were floated by using PAN, Aadhaar, and photographs of unknown persons to issue fake invoices and claim the input tax credit.
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To curb the menace, the ministry has created the Directorate General of Analytics and Risk Management to help with advanced analytics and innovative technology utilizing various data sources for a focused and targeted action by the enforcement wings.