PNB fraud case: BDO India was tasked to check on Nirav Modi and Mehul Choksi firms.
ON FEBRUARY 27, Punjab National Bank appointed BDO, a Belgium-based consultancy, to conduct a forensic audit on the firms of Nirav Modi after the state-owned bank found fraudulent transactions of over Rs 6,500 crore involving the diamond jeweller’s companies. But now, BDO’s India office, which is conducting the audit, finds itself under the scanner for alleged tax evasion.
BDO India and its partner MSKA & Associates are facing charges of alleged non-payment of Goods and Services Tax (GST) to the government since July 2017 despite collecting it from clients, officials told The Indian Express.
According to sources, officials of the Directorate General of GST Intelligence (DGGI), Pune, conducted a search at the offices of BDO India in Mumbai and Pune on March 27 and 28.
According to official sources, DGGI has alleged that BDO India and MSKA & Associates “collected GST from their customers of around Rs 13.5 crore and not paid to the government”.
A statement from DGGI, Pune, did not name the firm but said that “during the searches, GST of Rs 2 crore was recovered from the spot”.
When contacted by The Indian Express, a BDO India spokesperson said in a statement: “The visit of GST officials and their agenda was routine in nature and it turned out that BDO India was fully compliant on all concerns raised. The Rs 2 crore payment was also made by us, voluntarily in the course of discharging our liability, the rest of which is being paid, again in normal course and with concurrence of the tax officials. As a matter of policy and good governance, BDO discharges all its duties including payment of taxes responsibly and in compliance with the law.”
According to official sources, BDO India and MSKA have at least 14 GST registrations in different states. The two firms, according to officials, have filed GSTR 1 but not GSTR 3B returns since July 2017. GSTR 1 is the monthly outward supply return made by a business, while GSTR 3 B is a monthly self-declaration form of tax liability.
Speaking to The Indian Express on condition of anonymity, a senior partner at BDO India said that DGGI officials visited their offices and “asked a few questions” to which the company replied “adequately”.
“This visit by the DGGI officials was a part of the year-end activity of the agency. We have adequately replied to the officials and we are also representing our views through hearings conducted by the DGGI,” said the partner.
This month, BDO India was also tasked by PNB with conducting a forensic audit of firms belonging to Modi’s uncle, Mehul Choksi — companies linked with Modi and Choksi are together alleged to have been involved in fraudulent transactions with the bank amounting to over Rs 13,400 crore.