Thiruvananthapuram: As part of the ongoing drive of the Central Board of Indirect Taxes and Customs (CBIC) against the entire network of GST evaders, the Thiruvananthapuram central GST commissionerate has unearthed malpractices worth close to Rs 14 crore by two business houses run by a businessman.
According to the GST commissionerate authorities here, the owner of Zigma International Networking Private Ltd and Zigma Solutions was arrested here on Tuesday and the economic offences court has remanded the accused and further investigation was in progress.
It was found that the companies owned by the individual generated fake purchase bills with a fraudulent intention and claimed input tax credit for the fake purchases made between two entities. The practice is said to be one of the major frauds reported from across the country ever since the introduction of GST tax regime.
Under the input tax credit facility, a manufacturer of a goods can claim the tax paid for the purchase of raw materials and the tax thus claimed can be deducted against the outward tax to be paid by that entity. However, fraudsters indulge in circular trade between companies by raising fake invoices, thus adulterating the data for various purposes. Fake input tax claims are often generated to mislead banks with bogus financial health.
“The managing director of Zigma International Networking Private Ltd and Zigma Solutions has indulged in circular trading between the two entities by issuing invoices without actual supply of goods and availed input tax involving GST of about Rs 12 cr. In the process, evasion of GST cumulatively amounting to Rs 1.95 crore by the two companies were also detected,” authorities said.
Thiruvananthapuram zone has so far detected cases involving ineligible input tax credit of around Rs 30 crore and three persons have been arrested in this connection so far. The offences relating to false claim of input tax are liable for punishment under Section 132 (1) of the Central Goods and Services Tax Act 2017. tnn