Steel factory MD held for GST fraud in Hyderabad, Rs 3 crore seized

The case assumes significance as it is one of the first instances where an ultimate beneficiary of the illegal input tax credit has been tracked down and arrested in Telangana and Andhra Pradesh. 

HYDERABAD: In a crackdown on firms claiming input tax credit fraudulently through fake invoices issued by shell companies, the Hyderabad GST commissionerate officials on Saturday arrested the managing director of a leading manufacturer of steel products and recovered a sum of over Rs 3 crore. The company is said to have had an annual turnover of over Rs 600 crore. 

The case assumes significance as it is one of the first instances where an ultimate beneficiary of the illegal input tax credit has been tracked down and arrested in Telangana and Andhra Pradesh. 

Following leads from the Tirupathi Commissionerate regarding fake invoices to the extent of Rs 45 crore issued by three shell companies without any movement of goods, it was revealed that these firms were floated only to pass on credit by issue of fake invoices. 

Two of these firms were based at Kadapa and one at Rajahmundry.  
The private limited company headquartered at Banjara Hills has an array of reputed clients and is endorsed by a Tollywood superstar. During the course of the investigation, the firm was found to have indulged in a ‘huge evasion’ of Goods and Service Tax by way of availing irregular input tax credit based on fake invoices. Further search operations at the business, factories and residential premises found that the company has availed input tax credit of Rs 3.77 crore based on invoices issued by the three shell companies in question. 

In addition, it was also found that the company could not account for their finished goods of 288.7 MT of MS Channels and 48.12 MT of TMT bars put together at a value of Rs 1.3 crore, involving a GST of Rs 23.4 lakh. Officials said that further investigation was in progress to identify the involvement of more shell companies if any. “The case has wider ramifications,” added officials, who suspect more such frauds among a large number of Iron and Steel companies causing GST revenue loss to the government exchequer.

Source- New Indian Express.

The post Steel factory MD held for GST fraud in Hyderabad, Rs 3 crore seized appeared first on GST Station.



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