Govt Treasury Saves Rs. 350 Crore as Data Analytics Helps Govt Dig Fake IGST Refunds

Data Analytics of the Revenue Department found out 1200 exporters linked to GST return frauds. These untraceable exporters are said to have used forged identities, which, as per the government, would have left a digital trail.

Crux of the Matter

1. “The department has reasons to consider those nefarious elements among the customs broker community may be connected with these frauds, involving fictitious entities, existing only in virtual space through identity thefts with fake and morphed documents“, as per Revenue Department’s source.

2. Central Board of Indirect Taxes and Customs may obligate customs brokers under their licensing conditions to independently verifying the KYC of exporters.

3. Revenue department came to know about this fraudulent activity while carrying out physical scrutiny of the firms at their declared addresses, where they found no existence of firms.

4. Around 50 custom brokers have been found guilty for making fake documents, virtual entities. Custom brokers are now under the lens of the Revenue department.

5. Tracing fake web profiles helped the department to dig the fraudulent activity further. It found fraudulent tax credit worth Rs. 195 crores and untraceable suppliers. In total, revenue department has rejected Rs. 350 crores of GST refund coming from fraudulent firms.

6. This kind of incident shows loopholes in the execution of GST.

Curiopedia

Indian Revenue Service – The IRS comprises two branches, IRS (Income Tax) and IRS (Customs and Indirect Taxes), controlled by two separate statutory bodies, the Central Board of Direct Taxes (CBDT) and the Central Board of indirect taxes and Customs (CBIC). The duties of the IRS (IT) include providing tax assistance to taxpayers, pursuing and resolving instances of erroneous or fraudulent tax filings, and formulating and enforcing policy concerning income tax in India. The duties of the IRS (C&IT) include formulation and enforcement of policy concerning the Goods and Services Tax, prevention of smuggling and administration of matters related to Customs and Narcotics. More Info

Curated Coverage

1. Economic Times – Over 1,200 exporters untraceable; government saves Rs 350 crore fake IGST refund

2. Business Standard – Over 1,200 exporters untraceable, Rs 350 crore fake IGST refunds saved

#GST #IncomeTax #RevenueDepartment