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DGGI officials arrest two over massive GST fraud

DGGI officials arrest two over massive GST fraud

Kolkata: Two persons have been arrested by the officials of Directorate General of Goods and Service Tax Intelligence (DGGI), Kolkata Zonal Unit, on Tuesday, for their involvement in a case of GST fraud.

The accused persons were produced before the Additional Chief Judicial Magistrate,

Sealdah and have been remanded to judicial custody till March 6.

According to the Joint Director of DGGI, Kolkata Zonal Unit, K Kalpana, the accused persons identified as Kamal Kumar Jain and Deepak Upadhyay used to operate a racket and had floated a number of fake companies which existed only on paper.

They also used to pass several fake invoices without any supply of goods or services. But based on those invoices, the accused persons used to take input tax credit, which were passed on to the recipient companies.

As per the system, if a person sells some goods or provides service to another person, then the buyer has an option to avail tax credit. As the buyer has already paid an amount as GST to the seller, he is entitled to get the benefit.

After he makes something out of the bought goods, he pays the GST to the government, after adjusting the tax paid to the seller.

In such fraud cases usually fake companies are floated and fake invoices are generated. In this case, Jain and Upadhyay had taken tax credit amounting to approximately Rs 96 crore after generating invoices worth Rs 500 crore of bogus transactions.

To make the transactions look regular, they were made through Real-Time Gross Settlement (RTGS). It has also been found that such fake invoices were passed on to companies across the country for availing irregular input tax credit, causing huge loss to the government.

On Tuesday, acting on a tip-off, DGGI officials conducted search operation in 10 locations from where a huge number of incriminating documents were seized.

After scrutinising the seized documents, the racket was unearthed. DGGI, Kolkata Zonal Unit had earlier arrested six persons in connection with similar cases. Investigation in those cases is still going on to find out any further ambiguities.

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