CGST Commissionerate detects massive GST evasion by steel unit in Kashipur

By Our Staff Reporter
Dehradun, 24 Aug: The CGST Commissionerate Dehradun led by Commissioner Deepankar Aron has detected huge evasion of GST to the tune of Rs 5 crores by an Iron and Steel Unit in Kashipur. It has recovered GST of Rs 5 Crores in a search operation that was carried out simultaneously at nine locations spread over 5 different states.
Aron disclosed that, based on intelligence inputs, an investigation was initiated against M/s GalwaliaIspat Udyog Pvt Ltd (GSTIN: 05AAACG5408K1ZR), Kashipur, a unit engaged in production of Iron and Steel products. As per the inputs available, it appears that the firm had fraudulently availed Input Tax Credit on the basis of invoices issued by either the non-existent firms or by firms without actual supply of goods. Accordingly, investigations were initiated by way of conducting of simultaneous raids at three locations in Kashipur in district Udham Singh Nagar including two business premises of M/s GalwaliaIspat Udyog Pvt Ltd and the residential premises of its Directors, Yogesh Kumar Jindal and Akshay Jindal. In addition, searches were also conducted at the locations of its suppliers located in Delhi, Aligarh, Moradabad, Amroha and in Garhwa (Jharkhand). These searches were conducted under section 67 of the CGST Act 2017.
During the searches conducted at Kashipur, various incriminating documents were recovered from all the premises. Further, statements under Section 70 of the CGST Act, 2017 of the Directors of the firm and other employees were also recorded. Investigations were also conducted at the end of the ‘suppliers’ of this firm. The searches at the declared premises of M/s Shree Shyam Traders (allegedly located in Delhi) revealed that this firm was non-existent. Similarly, the searches at the declared premises of another alleged supplier namely, M/s Shree Traders, allegedly located in Aligarh was also found to be non-existent. Yet another supplier, M/s Govind Trader located in Garwha (Ranchi, Jharkhand) during the course of investigations admitted to the modus operandi of issuing fake invoices without actual supply of goods and had admitted their GST liability.
Two out of the said suppliers were found to be non-existent and 2 had admitted to the modus operandi of issuing fake invoices without actual supply of goods and have admitted their GST liability when confronted with the evidences on record. The Modus operandi entailed taking fraudulent input credit of GST on these fake supplies. This fraudulent credit was then utilised to pay the output duty liability of the various outward supplies effected by the unit, thereby obviating the need to pay the requisite duty in cash leading to the evasion of revenues. Current identified amount of GST evasion is Rs 8.4 Cr even as further investigations are underway.