Firms booked for fraudulently claiming IGST refunds worth Rs 61 crores, 2 arrested

The Directorate General of GST Intelligence (DGGI) on Friday booked Aastha Apparels and other firms for fraudulently claiming Integrated GST (IGST) refunds on the export of goods amounting over Rs 61 crore. It has been disclosed that Aastha Apparels Pvt Ltd and other companies have been found to have availed the Input Tax Credit (ITC) fraudulently on the basis of invoices received from non-existent/nonfunctional firms or from companies engaged in circular trading.

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During the investigation, it was revealed that supplier companies to these export firms were controlled and managed by a few persons and they were also engaged in claiming of suspect IGST refunds.

"The said firms/companies did not have commensurate purchases backwards. It has been further revealed that the supplier companies to these exporter companies are controlled and managed by few persons only and they are also engaged in claiming of suspect IGST refunds. These companies have created a complex web of circular trading among themselves without commensurate payments or actual supplies of goods to pass on ineligible ITC to the exporters," a release by DGGI said.

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The anti-GST evasion authority has arrested two directors of the apparel export firms under various sections of the IPC.

"Two directors of aforesaid exporter companies have been arrested on March 7 under Section 69(1) of CGST Act, 2017 for offences under provisions of Sections 132(1)(b) and 132(1)(c) of the CGST Act 2017. The role of suppliers and other persons associated with these exporters is under investigation," the release added.

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The GST authorities have put heat on fraudsters in recent months to contain tax evasion and augment revenue. Data analytics are being extensively used to nab firms engaging in fraudulently claiming refunds. The loopholes in the law and rules have also been gradually plugged to prevent tax evasion. Further investigation in the matter is underway.

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(With inputs from ANI)