Guwahati: The Directorate General of GST Intelligence (DGGI), Guwahati, has busted a massive tax evasion racket worth Rs 70 crore involving the use of fake invoices.
The investigation, led by the DGGI, revealed a network of firms issuing fake invoices to fraudulently claim Input Tax Credit (ITC).
The investigation led to the arrest of Natwar Kumar Jalan, a partner at M/s Yash Associates based on Kedar Road in Guwahati, who illegally claimed Rs 10 crore in fake Input Tax Credit.
According to sources, at least a dozen suspicious firms were part of the scam, issuing bogus invoices to facilitate fraudulent ITC claims by Jalan’s firm.
He was produced before the Judicial Magistrate, who denied his bail plea and ordered him to 14 days of judicial custody, marking a critical step in the investigation.
Authorities from the DGGI have warned that more arrests are likely as the probe into the entire tax evasion racket continues to dismantle the entire network behind the tax evasion scheme.
Businesses involved in this scam create fake invoices without any actual exchange of goods or services. These fraudulent invoices are then used to claim Input Tax Credit (ITC), which reduces the GST liability of these businesses. This allows companies like M/s Yash Associates to illegally lower their tax burden, causing significant financial loss to the government.
In this instance, the network of fictitious firms collectively issued fraudulent invoices amounting to Rs 70 crore. These firms, which existed only on paper, served as conduits for illegal Input Tax Credit claims. This case represents one of the largest tax fraud incidents reported in the region.
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The DGGI has confirmed that this is just the beginning, and the probe into the entire network will intensify following Jalan’s arrest.
