Another chartered accountant, along with his four business accomplices, was arrested in Jaipur on Saturday in relation to GST invoice frauds. The arrested were allegedly operating 25 fake firms to fraudulently avail and pass on input tax credit (ITC) through bogus invoices without actual supplies of goods or services.
With this arrest, eight chartered accountants have been arrested so far in fake GST invoice frauds since mid-November 2020, informed sources at Directorate General of GST Intelligence (DGGI). Till now, 258 persons have been arrested in the nationwide drive to curb such frauds.
Chartered accountants' regulatory body, the Institute of Chartered Accountants of India (ICAI), has been informed about these arrests and have been asked to take appropriate actions as per their own rules.
DGGI sources said that 2,500 cases have been booked against 8,000 fake GSTIN entities so far, with Rs 820 crore being recovered from them. Out of the 258 arrested so far, at least two persons have been booked under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA), they added.
Chartered accountants arrested in multi-layered fake GST invoice frauds via multiple bogus firms include CA BS Gupta (Jaipur), CA Daulat S Mehta and CA Chandra Prakash Pandey (Mumbai), CA Lalit Prajapati (Ahmedabad), CA S Krishnakumar (Chennai), CA Nitin Jain (Delhi), CA B Srinivasa Rao (Hyderabad) and CA Ankur Garg (Ludhiana). They have been arrested on allegations of "operating multiple non-existent firms and fake entities to dupe the exchequer with fraudulent ITC utilisation in connivance with fraudsters and fly-by-night operators," sources said.
Department of Revenue sources stated that with complete data sharing among GST, customs and income tax departments, and use of data analytics, artificial intelligence and machine learning, the GST intelligence authorities have been able to identify miscreants indulged in tax evasion through various means including fake bills, as well as those availing these bills through layers of intermediaries. These measures have helped DGGI identify fake firms, and nab final beneficiaries of ITC frauds. The GST intelligence authorities have unearthed ITC scam in manpower services allegedly by big companies like Swiggy and Instakart, a subsidiary of e-com giant Flipkart.
The efforts to check GST invoice fraud has led to better compliance and has been attributed for GST collections reaching the record high of Rs 1.15 lakh crore for December 2020.