GST Fraud Committed By 3 CA’s, Govt Might Approach ICAITop Stories

November 21, 2020 12:57
GST Fraud Committed By 3 CA’s, Govt Might Approach ICAI

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ICAI is a body under the Chartered Accountants Act for regulating chartered accountancy in the country.

Based on the administrative control of the ministry of corporate affairs, the Institute functions. Of all the CAs in the world, ICAI is the second largest professional body.

Two officials said that three chartered accountants (CAs) have been arrested for their alleged involvement in generating bogus bills to fraudulently avail input tax credit (ITC) under the Goods and Services Tax (GST) regime.

The Directorate General of GST Intelligence (DGGI) would approach the Institute of Chartered Accountants of India (ICAI) on the same.

Continuing their drive against fraudsters, the DGGI and the Central GST Commissionerate has arrested 41 people, including three CAs and a Chennai-based businesswoman. The three CAs are from Hyderabad and Ludhiana.

These fraudulent activities are carried out by firms exploiting the convenience of carrying out a business and they get an easy GST registration done.

For a grant of registration in GST, they made use of liberal laws.

For arranging and organising fake invoices of fictitious firms for one company that led to fraudulent claims of ITC worth Rs 27.4 crore, the DGGI (Hyderabad) arrested one CA for being a part of the fraud.

Similarly, another CA from Hyderabad was arrested for  fraudulent claims of ITC worth Rs 10.37 crore.

Using tools such as artificial intelligence and data analytics on the e-way bill portal, these frauds could happen.

As per officials, these firms had a common set of ghost partners who got bogus bills worth Rs 158 crore, involving fake ITC of more than Rs 21 crore and monetisation of fake ITC of over Rs 5 crore through cash refund.

The second person, who works for DGGI, said, “With total 41 arrests of GST fraudsters so far, the agency has filed 577 cases against 2,221 identified entities in the eighth day of its drive against the GST fake invoice frauds.” Recent arrests were made in Gurugram, Nagpur, Kolkata and Mumbai, he added.

The government is also tightening the procedure for new GST registration to check frauds. “The businesses, whose owners or promoters do not have commensurate income-tax payment records, will require physical and financial verification before their companies can be given GST registration,” the first person said.

For availing ITC fraudulently and for activities leading to tax evasion, bank loan fraud, money laundering, and hawala transactions, these fake invoices were issued.  

“These activities have been largely carried out by non-existent or fly-by-night firms and by using a network of firms to game the system to usurp ITC on the commission basis,” he added.

By Neha Makhija

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