Four bogus firms in Bhuna defraud govt of Rs 3.6-cr GST

Sushil Manav

Tribune News Service

Chandigarh, January 9

Bhuna in Fatehabad district was a village till 2013 when it was elevated to the status of a Municipal Committee. Then, none of the traders in Bhuna had an annual turnover of Rs1 crore.

But things changed in 2018. Four new companies cropped up in August and together they “transacted business” worth more than Rs140 crore, with each one doing “sale and purchase” worth between Rs13 crore and Rs21 crore in just four months.

This caught the attention of the Excise and Taxation Department. Smelling a rat, department officials visited the addresses of the companies and found the firms were non-existent and “business” shown by the proprietors in their returns was only on paper.

The four firms were registered on the same day, August 3, 2018.

VK Shastri, Deputy Excise and Taxation Commissioner (DETC), Fatehabad, said one of the companies, Paradise International, raised 89 sale invoices of Rs21.39 crore, for which the firm’s GST liability came out to be Rs1.21 crore.

The firm showed purchase on 196 invoices worth Rs13.52 crore and showed in the returns that Rs1.29-crore GST was paid. On paper, the firm proprietor did not claim Rs8-lakh tax. But actually, he had not paid a single rupee in tax and committed a fraud of Rs1.21 crore.

Another firm, Dariya Agro Industries issued 47 sale invoices amounting to Rs18.96 crore with GST liability of Rs1.16 crore. And its 48 purchase bills were worth Rs18.96 crore with tax value of Rs1.16 crore.

DS Traders raised 70 invoices of Rs10.97 crore with GST liability of Rs72.14 lakh, but the firm’s returns showed that it had paid Rs70.96-lakh GST on 60 purchase bills worth Rs10.80 crore.

Mahabir Traders issued 28 invoices of Rs6.33 crore with GST liability of Rs50.7 lakh. But the firm showed in the returns 22 purchase bills of Rs4.21 crore and having paid Rs40.13-lakh GST.

Put together, the four firms committed a fraud of Rs3.6 crore.

The department has registered cases against the firms.

“The bogus firms sell their bills to genuine ones for a cut of 2 to 3 per cent who, in turn, claim input tax credits from the department to evade tax on their sales,” DETC Shastri said.