GST scam Rs 230-crore by Tamil Nadu steel traders
GST Fraud detection system is working very strongly which was not much during VAT regime under various state laws.
Now, state commercial taxes department of Tamilnadu has blown the lid off a Rs 230 crore scam involving Salem-based steel traders Mahendra Kumar Singhi and wife Suman, owners of Steel Hypermart India Pvt Ltd, and chartered accountant Mukesh Surana, who allegedly claimed several crore rupees as input tax credit by producing fake invoices of steel trading. This is believed to be one of the biggest GST frauds detected in the state.
The reasons appeared to be the ‘Loophole in GST software reason for malpractice’_
“Surana was helping them claim input tax credit in the name of five companies. Some companies which were actually trading in steel also used fake invoices, our investigation revealed,” the official said.
The department has timely sealed the offices and residential premises of the accused in Hosur, Bengaluru and Salem to avoid removal of data and records.
The department is likely to lodge a complaint with the Institute of Chartered Accountants of India against Surana for his involvement in the racket. As of now, GST software does not match purchases and sales. This is one of the main causes for traders claiming input tax credit using fake invoices. For every sale, there should be a purchase. But at present, we are not able to ascertain it using the software. We are trying to fix this problem and by June, a new software will be rolled out,” said the official.
The commercial taxes department has also developed its own software to scrutinize returns filed by assessees periodically which enables them to locate such type of frauds.
Other states are also working almost on similar lines.
Timely detection of such information will enable to control the volume of frauds now.
Affected person in such cases will not only be the person committing the fraud but also the person dealing with them.