34 bogus firms exposed in drive against GST fraud
Kochi: The enforcement wing of the state GST department recently uncovered 34 bogus companies operating in Ernakulam as part of a nationwide special drive that took place between Aug 15 and Oct 15. Most of these fraudulent companies were involved in the scrap and plywood sectors. The operators typically rented a building or space, paying an advance to the owner.
They then used the rental agreement to obtain GST registration. With this GST number, they were able to acquire e-way bills and tax invoices for transporting goods valued over Rs 50,000. According to regulations, businesses must pay taxes for the previous month by the 20th of the following month.
"Once they secured their GST registration, these operators, often stopped paying rent, leading to eviction by the property owner. They would then continue their operations without paying GST or filing tax returns, frequently setting up new bogus companies under different names," said a GST official.
These bogus firms do not pay taxes, forcing the department to initiate investigations. Once identified as fraudulent, we cancel their GST registration. We assess the tax amount based on the business conducted during their operation and issue a notice for payment. Often, they do not comply," said the official.
