‘Cancellation of bogus firms a major contributor in rise of GST collection by 25% in 2021-22 fiscal’

Kolkata: The Directorate of Commercial Taxes, West Bengal’s sustained raid since December 2021 to curb the menace of fake invoices under GST has recently led to the arrest of 2 persons from Howrah who had formed 146 shell companies that involved a fraud to the tune of Rs 593 crore.

The fake company has made a turnover of Rs 3,410 crore through such fake invoices and this is the highest amount of GST fraud in the state to date that has been unearthed by the Directorate.

Speaking at a special session on the occasion of 6 years of GST organised by Merchants’ Chamber of Commerce and Industry (MCCI) on Tuesday, Khalid Aizaz Anwar, Commissioner, State Tax, Directorate of Commercial Taxes, West Bengal said that 11 pan cards were involved in the creation of such bogus companies.

“Our raids and subsequent cancellation of registration of bogus firms that are being executed every month has been a major contributor in our GST collection rising by 25 per cent in the 2021-22 fiscal and a further rise of 21 per cent in the last financial year, “ Anwar said.

He reiterated that registration of genuine businessmen is never delayed in the state but if fraud is detected against the plan of a particular businessman the registration is rejected for obvious reasons.

“We have been getting alerts of such bogus companies in certain pockets of Dum Dum, Hooghly, Howrah, Behala, South 24-Parganas etc. Apart from pan cards, rent receipts of houses, electric bills of businessmen are being used for such fake registration,“ Anwar said.

GST registration can be done from anywhere in the country. But it has been witnessed that a good amount of registrations are being done from remote areas of the state which is rather unusual.

As per Section 132 of CGST Act 2017, issuance of an invoice without a supply of goods or services and wrongful availing or utilisation of Input Tax Credit is a cognizable and non-bailable offence.

The menace of fake invoice in GST is a major concern for the whole country, Bengal being no exception.