Engineering and construction major Larsen & Toubro had to deposit Rs 22 crore to the GST department after it was found involved in an alleged fake invoicing case, sources in the revenue department said. The Directorate General of GST Intelligence (DGGI) learned that L&T, among others, had availed Input Tax Credit after furnishing alleged fake bills generated by alleged fake firms floated by brothers Ankur Mittal and Mukul Mittal. The DGGI had arrested the two brothers in October last year.
According to a detailed status report filed by the DGGI in the Delhi High Court during the hearing of the bail plea of one of the accused Mukul Mittal, at least two end users Larsen & Toubro Limited and Rama Krishna Electro Components Private Limited (beneficiaries of the alleged fake invoices generated by the alleged fake firms of Mukul and Ankur Mittal) have been tracked and the two companies have voluntarily deposited Rs 22 crores and Rs 7 crores respectively, after initiation of the proceedings.
The DGGI had informed Delhi HC that the two accused had allegedly floated 400 such fake firms and issued invoices. The two brothers were alleged to have provided fake invoices through various firms, floated/managed either directly by them or by putting convenient people to manage their affairs, without any corresponding supply of goods and services.
In January, the premises of L&T, Zee Entertainment and some other Mumbai-based companies were raided by the I-T and GST departments after they were found availing Input Tax Credit based on alleged fake invoices. A revenue department source hinted that some of these 'bills' are related to political funding, but he refused to give more details of the same. Larsen & Toubro initially refused to comment on the story. However, after the story was published, L&T's communications team denied the charges calling the information "untenable on factual grounds". BusinessToday.In stands by the story.
The GST department has launched a crackdown against fake invoicing frauds and GST evasion since November 2020. So far, the department has arrested 329 persons and filed more than 3,200 cases against 9,600 fake GSTIN entities. The authorities have recovered more than Rs 1,000 crore from fraudsters. Out of the 329 arrests so far, 113 were proprietors, 46 directors/managing directors, 17 partners, 5 CEOs/CFOs/CMDs, 10 chartered accountants, 4 accountants and one each of company secretary, broker, and GST practitioner. Arrested persons include fake entities operators and the end beneficiaries who connive with these fraudsters running businesses of fake invoices.
The GST authorities have been using deep data analytics, integrated data-sharing and AI & ML tools along with BIFA to unearth the input tax credit (ITC) utilisation frauds via fake invoicing and bogus firms. The technology has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and their networking without any overreach, and has been able to pinpoint the fraudsters with specific inputs to take targeted actions and further investigations against them.
According to revenue department sources, the nationwide drive against fake GST invoice frauds have yielded record GST collections for over three months, fetching a record Rs 1.15 lakh crore in December 2020 and Rs 1.20 lakh crore in January 2021. The GST collection rose 7 per cent year-on-year to Rs 1.13 lakh crore in February.