Chandigarh, December 26: A firm in Rohtak’s Meham town, registered with the taxation authorities as a dealer of musical instruments, raised bills worth Rs 500 crore for the “sale” of cotton — all fake sales for the purpose of hoodwinking the government through bogus input credits.
Four non-existent firms in Fatehabad “purchased” cotton worth Rs 67 crore from the Meham firm and “sold” the “commodity” to firms in Punjab and Gujarat, again for bogus input credits, more commonly known as refund of taxes.
By the time the taxation authorities in Fatehabad realised the scam, input claims worth Rs 3.5 crore had already been taken away by the unscrupulous dealers.
“Input credits worth Rs 78 lakh have been blocked by us in our system, so that they are not able to claim this amount,” said VK Shastri, Deputy Excise and Taxation Commissioner, Fatehabad.
Shastri revealed that upon inquiries, it was found that musical instrument firm Priya Industries, that issued bills worth Rs 500 crore in just two months, was registered in the name of a migrant labourer from Uttar Pradesh, Suman Rani. Her residence address has been mentioned as Agra.
“When I noticed that four firms in Fatehabad were doing exceptionally huge business running into crores, I went to the address of the firms registered in the records. However, I found nothing but empty plots there,” he said.
Asked why can’t the addresses be verified at the time of registering the firms, Shastri said half of the firms in any particular area were registered by the Central authorities and the rest by the state authorities.
Though it is mandatory for officials of the Excise and Taxation Department to physically verify the address, online registration is automatically issued to a dealer under the new GST system even if a report has not been submitted by the inspector or the ETO concerned.
Of the four non-existent firms in Fatehabad, three were issued licence by Central authorities and one by the state authorities.
“We will fix responsibility and write to the higher authorities for taking action against those responsible for the lapse,” said Shastri.
Source Tribune India