Board Thread:General Discussion/@comment-12123985-20131009012528

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The income tax (I-T) department in Mumbai is investigating fake invoices amounting to a staggering Rs 30,725 crore. The size of the evasion has so stunned the Central Economic Intelligence Bureau, that it has asked all states to look for similar frauds.

The tip-off to the I-T department came from the sales tax department of the state government which came across over 2,000 agents supplying fake bills, who operate from Mumbai’s Girgaum and Kalbadevi areas.

Based on the information, the I-T department is planning the largest sweep on traders and small-time manufacturers for tax evasion in India’s richest revenue jurisdiction.

The department has landed on this treasure trove through the back-end IT platform created for Goods and Sales Tax (GST), which has begun matching sales with I-T returns.

The agents provide false invoices for the traders and manufacturers to mask their profit from sales. An official told The Indian Express that the frauds came into light when assessess uploaded their audited accounts along with annexures of purchase and sales on the sales tax department website. When the department turned over the data to the I-T department, as envisaged under the proposed Goods and Services Tax regime, the discrepancies between the sales and purchases started tumbling out.

As of now, the two departments have found 42,315 such records that have been put under the scanner. The papers have been used by the traders and manufacturers even for procuring loans from banks. Sectors including iron and steel, paper and chemicals are most susceptible to the fraud, the official added.

Of these nearly 10,000 cases have been sent to the various intelligence departments in the revenue machinery for investigation.

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