Bengaluru: Merchant held for Rs 8 crore GST evasion

Bengaluru: In its first ever case in the state, the Enforcement Wing of Commercial Taxes Department, Karnataka, arrested a scrap merchant for evasion of goods and services tax (GST) to the tune of around Rs 8 crore.

The Enforcement wing on Wednesday arrested Hameed Rizwan Parthipady Ismail, the proprietor of M/s A.R.S. Enterprises, based on credible information, under the provisions of the GST Act, 2017.

He had issued bogus tax invoices worth Rs 45.94 crore and evaded GST amounting to Rs 8.16 crore.

Ismail, a resident of Mathikere, had obtained registration under the GST Act, 2017 under the trade name ARS Enterprises, at  Basaveshwara Layout in Chickbanavara, bearing GSTIN: 29ABIPI7472B1ZL. He was dealing in ferrous and non-ferrous scrap during the period from July 2017 to July 2018.

The officials said the place of business was inspected by the Assistant Commissioner of Commercial Taxes (Enforcement) on August 27 and they found Ismail has not received any goods or services, but has claimed input tax without any purchases to avoid payment of tax.

It also came to light that Ismail had issued invoices for outward supplies to enable various purchasers to claim input tax credit without supply of goods or services whatsoever and thus facilitated to fraudulently claim input tax credit (ITC).

On verification of the data as depicted in the Data Analytics Software (GSTPro) of the Department Ismail's fraud came to light.

As per returns uploaded by Taxable Person in GSTR-1 and GSTR-3B filed for the periods from July 2017 to July 2018, the total value involved in the said tax invoices was Rs 45.94 crore and corresponding output tax involved was `8.16 crore.

When Isamail was asked to produce documents in support of the input tax credit claimed in GSTR 3B, he failed to do so.

He was found to be guilty of offence punishable under Section 132(b) of the CGST Act, 2017 and the concurrent provision under KGST Act, 2017.

Based on these observations Commissioner of Commercial Taxes, Karnataka authorised Ismail's arrest.

He was later produced before the Special Court for Economic Offences and the magistrate sent him to judicial custody till September 20.

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