Rs 569 crore GST evasion found in Tamil Nadu, Puducherry

CHENNAI: The GST commissionerate in Tamil Nadu and Puducherry has detected tax evasion to the extent of 569 crore in 169 cases since July 2017 when the new tax regime was introduced. The commissionerate, so far, has arrested five people for fraud and tax default.

GST chief commissioner C P Rao told TOI that most of the cases registered were regarding frauds in claiming input tax credit using fake bills. “The Chennai GST commissionerate has found that traders and businessmen are making fake invoices to show sale of goods to avail input tax credit. The department regularly gathers information about companies which are receiving fake invoices without receipt of goods. We follow it up with searches,” said Rao.

There are several modus operandi in evading GST and cheating the department. “Five people have been arrested so far under section 132 of CGST Act 2017. Investigation is under progress to unearth the modus operandi followed by the frauds,” said Rao.

Most of the fraudulent cases have been detected in Chennai and Coimbatore regions, he said. “We are closely watching some businessmen in other regions also,” he said.

The department has intensified stringent action against fraudsters, he said. On November 19 last year, a commodities trader, Danaram from Sowcarpet in north Chennai was arrested for evading GST to the tune of 61 crore by opening multiple GST registrations. Inquiries revealed that his network was wide and many more traders were involved in the chain. He was involved in varied businesses too. His total revenue was estimated at 352 crore. Danaram is lodged in Puzhal prison now.

Since it is easy to obtain GST registration, fraudsters go about creating multiple GST accounts with multiple identity proofs.

“If a trader applies for registration, it is granted by the department online within 3 working days. We do not do physical verification before granting GST registration. We go by the PAN details, mobile number and e-mail address. But wherever there is suspicion, we go about doing physical verification to detect frauds,” said Rao.