The modus operandi involved over-valuation to the extent of 3,000% of the market value of goods exported to the SEZ (zero rated supply) and fraudulently claiming refund of input tax credit (ITC).
Subsequently, refund of accumulated lTC, sourced fraudulently, in excess of Rs 400 crore was claimed by exporters from the jurisdictional GST authorities.
The Director General of GST Intelligence (DGGI) on Tuesday unearthed a fake invoice scam worth Rs 1,000 crore from Kandla SEZ in Gujarat revolving around purported export of sin goods made from tobacco.
Acting on intelligence inputs that a few units in Kandla SEZ at Gandhidham, in connivance with about 20 export firms based in the National Capital Region (NCR), were committing a fraud, officials from DGGI’s Ahmedabad zone conducted searches in three units in the SEZ and on premises of some NCR-based exporters and unearthed the scam.
The modus operandi involved over-valuation to the extent of 3,000% of the market value of goods exported to the SEZ (zero rated supply) and fraudulently claiming refund of input tax credit (ITC).
“The commodity selected by scamsters for the fraudulent act has been found to be sin goods viz ‘manufactured tobacco and other related products’ falling under CTH 2403 which is subject to tax at the rate of 93% and 188%, including cess,” said the DGGI in a statement.
According to the statement, low grade material like scented jarda, kimam (tobacco extract) and filter khaini, manufactured clandestinely without payment of tax by a few Noida-based units or procured from the local market at the rate of Rs 150-350 per kg, were exported to SEZ-based units at the rate of Rs 5,000-9,000 per kg. Subsequently, refund of accumulated lTC, sourced fraudulently, in excess of Rs 400 crore was claimed by exporters from the jurisdictional GST authorities.
The agency has been able to identify more than 25 suppliers located in Assam, Bihar, Delhi, Haryana, MP and UP who had issued fake invoices of more than Rs 1,000 crore to NCR-based exporters without supply of goods to facilitate refunds.
via Rs 1,000 crore fraud: Fake GST invoice racket unearthed in Kandla – The Financial Express
aniltikotekar4sme.com 