Data analysis has helped ministry to detect around 931 cases of fraudulent GST. Most of this cases include fraudulently availing Input Tax Credit (ITC). The fraud has been detected in Kolkata, Delhi, Jaipur and Punchkula (Haryana).
Such identified taxpayers who have purchased goods from other defaulters will face required verification and scrutiny. These cases are weekly reviewed and monitored by the Union Revenue Secretary, Dr. Ajay Bhushan Pandey.
One significant fraud case has been detected through investigators in Delhi,where defaulters created a network of over 500 entities consist of fake billing, intermediary dealers, distributors and even include manufacturers of footwear, so as to avail and claim fake ITC credits. These fake manufacturers in Uttarakhand were making supplies to other fictitious entities & retailers in Gujarat, Maharashtra and Tamil Nadu. The raw material for the footwear, known as EVA compound, are chargeable @18% duty whereas footwear are chargeable to GST @5%. As a result, the rules allows the manufacturers to claim refunds of the inverted duty structure in cash.
Another important case was of IGST fraud in Surat where preliminary investigations revealed that 19 firms fraudulently claimed ITC of ₹55 crores against the fake invoices received by these firms valued approximately ₹679 crores.
In this case, during the search at the premises of two kingpin firms M/s Satyam Impex and M/s Aatif Fashion, it was revealed that 17 other firms were registered with GST by misusing the identity documents of daily wagers, casual workers etc.
So far, Data Analytic department of GST has been able to identify all such cases which involve fake invoicing and fraudulent tax credits which have been tried to encash through IGST refunds.