Interestingly, 49 percent of those caught in the last two years or 1,256 firms are from the district of Ahmedabad. (Representational Photo)

In the last two years, at least 2,547 firms and individuals in Gujarat were caught for wrongfully claiming Input Tax Credit (ITC) under the Goods and Services Tax (GST). Some of the fake bills submitted amounted to as high as Rs 1,000 crore, Deputy Chief minister Nitin Patel told the Gujarat assembly on Thursday during the Question Hour.

The ITC wrongfully claimed in the last two years is estimated to be Rs 607.75 crore, of which Rs 67.32 crore has been recovered from the erring entities, the state government told the House.

“A manufacturer who paid GST while buying raw material can claim input tax credit when he sells the finished product. But there are people who indulge in fraud and try to claim input tax credit by producing fake bills. Our GST department takes action against all those claiming input tax using wrong means by imposing fines and penalties,” the Deputy CM said while replying to a question posed by Congress MLA from Rapar, Santokben Aarethiya regarding steps taken against businessmen for falsely claiming ITC.

“Bogus bills amounting to Rs 1,000 crore are produced without buying, selling or paying any tax. There are people who indulge in forging bills for claiming the input tax credit…the matters have gone till the Gujarat High Court,” he added. Actions that are taken against erring individuals and firms include cancellation of their registrations, blocking the software through which the input tax credit is claimed and initiating proceedings which includes seizure of property, he said.

The various written replies filed in response to similar queries by different MLAs showed that in 2018, there were 140 firms and individuals who were caught for wrongly claiming ITC worth an estimated Rs 54.36 crore. This number of wrongdoers shot up to 2,407 in 2019 and the estimated ITC wrongfully claimed touched Rs 553.39 crore. Interestingly, 49 percent of those caught in the last two years or 1,256 firms are from the district of Ahmedabad.

In 2018, Ahmedabad reported 78 such cases, which increased to 1,178 in 2019. Similarly in Surat, the numbers shot up from 5 cases in 2018 to 722 in 2019. Rajkot, too, saw a similar rise from seven fraud cases in 2018 to 233 cases in 2019.