Category: GST

CGST Commissionerate Mumbai South Arrests Co-conspirator in a Fake Input Tax Credit Claim of Rs. 11.07 Cr; Proprietor arrested earlier


CGST Mumbai South Commissionerate has detected tax evasion of Rs. 876 Crores, recovered Rs. 14.4 Crores so far

Anti-Evasion Unit of Mumbai South CGST Commissionerate has arrested the co-conspirator in a case of M/s New Laxmilal & Co. (GSTIN 27ACAPS6257K1ZS) involving fake ITC of Rs. 11.07 Cr on the strength of bogus invoices of Rs 62.90 Cr, without actual movement of goods. This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the tax evaders.

The accused has accepted that he supplied bogus invoices to M/s New Laxmilal & Co. involving network of seven non-existent entities. Based on material evidence and his confessional statement, the accused was arrested under Section 69 of the CGST Act, 2017 for committing offences under Section 132(1) (b) & (c) read with Section 132(5) of CGST Act, 2017. He was produced before Additional CMM court, Mumbai today, 26^th April 2022 and was remanded to judicial custody of 14 days. The proprietor of M/s New Laxmilal & Co. had already been arrested in Dec 2021 for availing and utilizing fake ITC on the strength of bogus invoices of Rs 62.90 Cr.

As a part of this drive, CGST Mumbai South Commissionerate has detected tax evasion of Rs 876 Crores approx., recovered Rs. 14.4 Crores approx. and arrested eight persons during the last seven months.

The CGST department is using state of the art and sophisticated data analytics and network analysis tools using Artificial Intelligence, to identify potential and chronic tax offenders. Department is also coordinating with other tax and law enforcing authorities for nabbing tax evaders.

It has been noted that a section of the media has reported that feedback has been sought from States regarding a suggestion for raising Good & Services Tax (GST) rates on 143 items.

Some reports have even carried the number and description of items. It is clarified that no feedback from States has been sought on the GST rates for any specific items or specific proposals to restructure the rates and the reports regarding the same are purely speculative without any basis in fact.

The GST Council, in its 45th Meeting had formed a Group of Ministers (GoM) to look into the rationalization of rates. The deliberations of the Group are ongoing. The views of the States were sought generally on the Terms of References (ToRs) of the GoM soon after it was set up in September, 2021. A report of the Group is yet to be submitted to the Council for consideration.

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GU), Gurugram, has unearthed a case wherein a series of entities controlled by a person as Proprietor / Director of M/s Umang Overseas, M/s Ulagarsan Impex Put Ltd and M/s Umang Impex Private Limited, was found to be involved in availing and passing fraudulent Input Tax Credit (ITC) of Rs  16.74 crore without receipt of goods from different fake, suspended and non-existent firms.

A search was conducted at various premises on 04.04.2022. During the search, many pen drives, rubber stamps of different firms, documents/ records were resumed and the same are being investigated for estimation of duty evasion.

The key person involved in availment and passing of fraudulent ITC was arrested on 05.04.2022 and produced before the Chief Metropolitan Magistrate, Patiala House Court on 05.04.2022 and ordered judicial custody for 14 days.

Further investigation in the matter is under progress.

GST year end compliance review for FY 2021-22 II April 2022

The gross GST revenue collected in the month of March 2022 is ₹ 1,42,095 crore of which CGST is ₹ 25,830 crore, SGST is ₹ 32,378 crore, IGST is ₹ 74,470 crore (including ₹ 39,131 crore collected on import of goods) and cess is ₹ 9,417 crore (including ₹ 981 crore collected on import of goods). The gross GST collection in March’2022 is all time high breaching earlier record of ₹ 1,40,986 crore collected in the Month of January 2022.

The government has settled ₹ 29,816 crore to CGST and ₹ 25,032 crore to SGST from IGST as regular settlement. In addition, Centre has also settled Rs. 20,000 crore of IGST on ad-hoc basis in the ratio of 50:50 between Centre and States/UTs in this month. The total revenue of Centre and the States in the month of March 2022 after regular and ad-hoc settlements is ₹ 65646 crore for CGST and ₹ 67410 crore for the SGST. Centre also released GST compensation of  ₹ 18,252 crore to States/UTs during the month.

The revenues for the month of March2022 are 15% higher than the GST revenues in the same month last year and 46% higher than the GST revenues in March 2020. During the month, revenues from import of goods was 25% higher and the revenues from domestic transaction (including import of services) are 11% higher than the revenues from these sources during the same month last year. Total number of e-way bills generated in the month of February 2022 is 6.91 crore as compared to e-way bills generated in the month of January 2022 (6.88 crore) despite being a shorter month, which indicates recovery of business activity at faster pace.

The average monthly gross GST collection for the last quarter of the FY 2021-22 has been ₹ 1.38 lakh crore against the average monthly collection of ₹ 1.10 lakh crore, ₹ 1.15 lakh crore and 1.30 lakh crore in the first, second and third quarters respectively. Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalization measures undertaken by the Council to correct inverted duty structure.

The chart below shows trends in monthly gross GST revenues during the current year. The table shows the state-wise figures of GST collected in each State during the month of March 2022 as compared to March 2021.

Through extensive analysis of E-way bills, CGST Delhi East Commissionerate had busted a syndicate of five firms who were engaged in availing and utilising fake Input Tax Credit (ITC) of Goods and Services Tax (GST).

During further investigation it was found that this syndicate was using two more entities namely, M/s Shree Mahaveer International and M/s Gravity Enterprises. A communication was also received from GST, Gujarat State that a car bearing registration no. DL8CAS5941, registered in the name of one of the syndicate firm M/s Blue Water Expotrade Private Limited was intercepted by them in Ahmedabad. FastTags of Trucks were affixed on the car to create false movement of export goods from Delhi to Mundra port. The E-way bills in respect of the fake supply were issued by M/s Shree Mahaveer International.

Search was conducted at residential premises of Shri Rakesh Kumar Jain, proprietor in M/s Shree Mahaveer International and Partner in M/s Gravity Enterprises on 10^th March 2022. Shri Rakesh Kumar Jain in his voluntary statement admitted that bogus invoices were received and issued from these syndicate firms without actual supply of goods.

It was evident that Shri Rakesh Kumar Jain was using multiple firms to avail and pass on fake ITC on bogus invoices and E-Way Bills without actual supply of goods. The quantum of GST evaded by him is more than Rs. 85 crore.

Therefore, he was arrested on 10^th March 2022 for committing offences specified under Section 132(1)(b)&(c) of the CGST Act, 2017 and produced before Metropolitan Magistrate Patiala House Courts, New Delhi.

Investigation by CGST Delhi (East) Commissionerate so far has unearthed fake ITC racket by seven firms namely, M/s Vibe Tradex, M/s Prime Mark Expotrade Private Limited, M/s Blue Water Expotrade India Private Limited, M/s Transglobe Tradex Private Limited, M/s Tirupati Overseas, M/s Shree Mahaveer International & M/s Gravity Enterprises. Further investigation in the case is under progress.

Enhanced GST Registration Application user interface (UI) II GST updates 10th March 2022

 User Interface (UI) with respect to the address fields in the Registration Application GST REG-01 has been enhanced as follows:-

• Incorporation of a map tile along with a drag and drop facility of address pinhead on to the exact location of the applicant’s address.
• Once selected, the details will automatically fill in the various address input fields given in the application.
• Address fields have been linked so as to auto- fill other macro level address entry fields based on the entry in one of such fields particularly PIN Codes. For example; on entering the PIN code, the corresponding State and Districts will get auto- filled.
• The user can also directly fill-up the address input fields which are now aided with suggestive address input dropdowns from which the user can select the appropriate/relevant address field(s). This action will reduce errors in the address texts and will also ease the filling up of the appropriate address input fields by the user.
• The address fields have been segregated appropriately to reduce confusions while entering the relevant inputs under various address heads.
• Based on the address entries given by the user, the Latitude/ Longitude of the address will get auto populated which is non-editable.

GSTN enabled a new feature of Geo-location for new registration and amendment of address for existing registration The Goods and Services Tax Network (GSTN) has enabled new feature of Geo-location for picking address for new registration and amendment of address for existing registration.

Map Location must for GST Registration

1) GSTN has made ‘map location’ mandatory for new registrations under GST law as well as for amendment in address in case of existing registration on the GSTN common portal.

2) Assessees seeking registration or amendment in registration will have to mention or enter exact location of premises to be registered as per ‘google’ map location.

3) This is to curb the practice of registration of non-existent premises or premises with fake addresses.