Documents of Unsuspecting People Used for GST Fraud, ITC Claims
Aadhaar, PAN, and bank details of people are obtained by paying them amounts between ₹10,000 and ₹20,000 for GST registrations.
Tirupati:White collar criminals are luring petty traders, fruit vendors and lorry drivers into sharing their Aadhaar, PAN details, and even other personal details like fingerprint and iris against payments of amount between ₹10,000 and ₹20,000 each in Chittoor and Tirupati districts.
The criminals then use these details to open firms and bank accounts in the names of people who share their details and secure GST registrations. They then generate invoices, show purchases and sales and claim huge input tax credit (ITC), which the criminals pocket.
The issue came to light recently after a lorry driver from Telangana received notices over transactions he said he had never carried out. Ramesh (name changed, from Ranga Reddy district told police that a person from Palamaner had taken his Aadhaar, PAN and bank passbook details, and obtained a GST registration in his name.
Ramesh approached police after GST officials informed him that transactions worth ₹36 crore have been recorded in his name over five months. “I have never carried out business worth crores. I came to know about the transactions after I received the GST notices," Ramesh told police in a complaint.
The complaint has revived allegations of an old ₹400-crore fraud involving scrap traders in the erstwhile district, in which fake documents were allegedly used to show transactions, GST payments and claim ITC. GST officials had recommended action against seven companies. Now, they suspect that a person allegedly involved in last year’s scam may also be linked to the latest case.
"Many of those whose documents are used do not even have a basic understanding of GST registration. Their names are used to create firms and show transactions that they have no knowledge about," an official familiar with the matter said.
A similar case had been reported in Chittoor last year when a young man received two GST notices demanding ₹42.73 lakh in tax over transactions he allegedly knew nothing about. The transactions are mostly related to scrap goods. Traders are shown as purchasing goods after paying GST. These goods are then shown as sold. They then claim input tax credit ITC. In many cases, invoices are generated without any purchase or sale.
This raises questions whether the GST department itself has any means of discovering these frauds on its own or comes to know about it when people complain after receiving notices from the department. "It is possible that some such cases may escape detection at the registration stage. We are looking into the transactions and circumstances under which the registrations have been obtained," a GST official said.
GST Racket
- Fake invoices and scrap transactions are carried out to claim input tax credit.
- The racket comes to light when people sharing their details receive notices from the GST department.
- A Telangana lorry driver received notices over ₹36-crore worth transactions recorded in his name in five months.
