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GST raids at 205 locations in Gujarat

Ahmedabad, Nov 13, 2022

In what appears to be a high-value bogus billing scam that has surfaced just ahead of the state assembly election, the state goods and services tax (SGST) department along with ATS and Ahmedabad crime branch raided the premises of some 115 suspected bogus companies, since early on Saturday morning.

Based on technical intelligence, SGST officials identified bogus companies in Ahmedabad, Surat, Vadodara, Valsad, Rajkot, Panchmahal, Junagadh, Jamnagar, Kutch, Kheda, Narmada, Mahisagar, Bhavnagar, Bharuch, and Anand. SGST officials carried out raids across 205 locations in these cities. Some 90 teams have been deployed.

SGST officials said 91 persons are being interrogated in relation with this case.

The preliminary investigation revealed that each bogus firm was used to generate and issue bills for commodities such as scrap, metal scrap, metals, chemicals, and metal rods, to avail and pass on illicitly obtained input tax credit.

More bogus firms have also come to the fore during the investigation. Officials expect higher tax evasion to be reported as the investigation progresses.

Sources privy to the developments said during the investigation of fake billing scams reported recently, it was found that illicitly obtained input tax credit using fake bills was used to fund illegal activities.

"In the past, in certain cases, we found that fake companies registered in Gujarat have bank accounts in remote locations such as Assam. More recently, the Reserve Bank alerted central agencies in Indore and Mumbai about high-value transactions taking place through Paytm, based on which the GST evasion scam involving 500 fake companies was unearthed and four persons were arrested in Surat. In this case, it is suspected that money siphoned off using fake bills is being transferred through hawala. We are still investigating," a top source told TOI.

The economic offences cell of Surat police also recently arrested 16 persons for a fake billing scam, based on a tip-off about high-value transactions.

"This scam appears to be well-calculated and spread across various states and districts. It involves a lot of offences of forgery and others not under the direct purview of the state commercial tax department. Therefore, other law enforcement agencies have been roped in for investigation so missing links can be identified," the source added.

[The Times of India]

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