Bengal commercial taxes directorate unearths Rs 4,716 cr fake GST invoice rackets

The operators used to lure unsuspecting individuals with petty cash or promises of employment and fraudulently obtained their PAN, Aadhaar, and other identification documents. Using them, they incorporated several fake firms and obtained GST registrations.

Ashesh Mallick, PTI and India TV, Kolkata ,December 01, 2023 : The West Bengal Directorate of Commercial Taxes (State GST) has unearthed huge fake GST invoice rackets which involve a turnover of Rs 4,716 crore and held four key operators, officials said on Friday (December 1). 

This is the first time in the history of the directorate since 1941 that arrests have been made directly under its Bureau of Investigation. The officials said that earlier, help was taken from the police for arrests.

"The tax evasion involved in the two rackets was a staggering Rs 801 crore", Directorate of Commercial Taxes Commissioner Khalid Anwar said.

Additional Commissioner Sudeshna Mukhopadhyay said that the total turnover involved in these two rackets amounts to Rs 4,716 crore.

"A calibrated investigation since February has revealed that four operators created a network of 178 fake concerns in West Bengal, issuing fraudulent invoices to evade Rs 801 crore in government tax revenue," Mukhopadhyay said.

Two Deputy Commissioners Somasree Kar and Madhumita Kundu were the investigating officers who busted the rackets with the assistance of a team of nearly 25 officials of the Bureau of Investigation, South Bengal, she said.

"They worked day and night to find out the entire trail. The investigation is still on," Mukhopadhyay said.

How did the accused operate?

The operators used to lure unsuspecting individuals with petty cash or promises of employment and fraudulently obtained their PAN, Aadhaar, and other identification documents. Using them, they incorporated several fake firms and obtained GST registrations.

"To further their fraudulent activities, the operators forged rent agreements, electricity bills, property tax certificates, and even signatures of premises owners and notaries. The entire racket was fueled by money laundering through both banking channels and cash transactions," Mukhopadhyay said.

One of the arrested persons is in judicial custody, while the other three have been granted bail with directions to cooperate with the ongoing probe.

"We are currently preparing a prosecution complaint (charge sheet) to be filed before the court. Further investigations are underway to identify and apprehend other individuals involved in this massive tax evasion scheme," Anwar said.

According to Anwar, the arrests and the ongoing probe will serve as a deterrent to those involved in tax evasion and demonstrate the Directorate's commitment to safeguard the government's revenue.