Quick Summary
An intelligence was developed by the officers of DGGI that few exporter companies were engaged in fraudulent availment of Input Tax Credit (ITC) on the invoices of non-existing and fictitious firms or such firms which apparently do not have any purchases themselves. The ITC so availed was utilized to pay IGST on the export goods, which was thereafter claimed as cash refund. Thus, the government exchequer was put at double loss on one hand ITC was obtained on goods where no tax was paid and on t
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FAQ :
The DGGI uncovered exporter companies engaging in fraudulent availment of Input Tax Credit (ITC) from non-existent or fictitious firms. This ITC was then used to claim IGST refunds on exported goods.
The estimated amount of IGST refund obtained through this fraudulent scheme is approximately £61 crore.
The government suffered a double loss: first, by allowing ITC on goods where no tax was paid, and second, by issuing cash refunds of IGST paid using this fraudulently obtained ITC.
The DGGI conducted searches on exporter companies, their owners' residences, and supplier premises. They have also arrested the controllers of the export firms and the owner of the supplier firms.
Yes, the owner of the supplier firms, who was initially on the run, was traced and arrested in Shimla on 07.10.2020 and subsequently sent to judicial custody.
No, further investigations into the matter are currently in progress.
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