Registration of over1,200 bogus dealers cancelled

Tribune News Service

New Delhi, July 10

The Department of Trade and Taxes has cracked down on bogus dealers registered under the Goods and Services Tax (GST) and involved in issuance of fake invoices, said an official statement issued on Wednesday. 

The raid was conducted on the directions of Deputy Chief Minister Manish Sisodia, who also holds the portfolio of Finance. Sisodia reviewed the situation twice in the last month and ordered stringent action against the guilty.

According to the statement the department conducted field verifications and inspections of 16,141 suspicious dealers through GST inspectors. Of it, 4,618 dealers were found non-existing or bogus. These dealers had got their registration under the GST to defraud the government exchequer using fake invoices, the statement said.

“The department started action against the dealers in accordance with the provisions of the GST Laws and Rules. Registration of 1,282 dealers has been cancelled and show-cause notices for cancellation have been issued to 3,221 dealers, of which proceedings are still underway. Besides, 887 dealers were under the jurisdiction of the Central tax authorities, therefore required information had been sent to them for taking further action,” the statement said.

As per the statement, the input tax credit (ITC) of more than Rs 128.3 crore had been blocked in respect of 1,526 bogus dealers so that these dealers could not avail the ITC illegally.

The state tax officers also started field inspection of all the dealers who had made transactions from these traders. Cancellation of registration of such dealers was also on the cards, the statement said.

The department had directed the tax officers to recover the entire amount of tax, interest and penalty from such dealers as well as to take legal action against them.

The purpose behind the use of such fake invoices was the fraudulent encashment of the ITC. The bogus entitles engaged in such activity defraud other authorities such as banks by deflating turnovers and money laundering etc. They do not undertake actual trading of goods and services, but get transactions made on paper without physical delivery of goods or services, the statement said.

“The government has decided to speed up the process of cracking down on all such dealers to eliminate the use of fake invoices from the city which is affecting the government revenue as well as spoiling healthy trade practices in the Capital,” it said.