Uttarakhand businessman gets 5 years RI for GST evasion
Haridwar’s chief judicial magistrate Mukesh Chandra Arya on Saturday sentenced Uttarakhand businessman Surendra Singh to five years’ rigorous imprisonment after he was found guilty of Goods & Services Tax (GST) evasion under section 132(1)(i) (the amount exceeds Rs 5 crore of Input Tax Credit wrongly availed).
Singh allegedly registered six shell companies and falsely claimed Input Tax Credit (ITC) worth Rs 17 crore.
Input Tax Credit refers to the tax already paid by a person at the time of purchase of goods or services and which is available as deduction from the tax payable.
Singh declared his main business as a manpower supplier but allegedly took advantage of ITC by showing fake purchase and sale of iron ore, plywood and furniture from non-existent companies. The court also slapped a fine of Rs 1 lakh on him.
Deputy commissioner, GST, Vinay Pandey said, “Since no bill is generated in manpower supply business, Singh was supposed to deposit the GST amount in cash, but he produced fake bills of non-existent companies to avail of ITC benefit so that he wouldn’t have to pay GST. Now, recovery of evaded GST from him has been initiated.”
Prosecution lawyer advocate said the court conducted a speedy trial, completing it in eight months and sentenced the guilty of GST evasion. About eight months ago, a centralised investigation unit of the department raided six firms, including a manpower supplier firm, PS Enterprises, in connection with fake ITC claims.
“During investigation, it was found that Singh, the operator of PS Enterprises, made fake purchases of iron ore and plywood from firms in Delhi, UP and Haryana. He made the purchase through his five other firms. Probe also revealed that the firms from which fake purchases were shown to be made, do not exist. Singh received a claim of Rs 17 crore from the department on fake purchases. The GST team arrested Singh on April 5, 2022,” the prosecution lawyer said.
GST commissioner (state tax), Ahmed Iqbal, said this is the first conviction in the country for GST evasion. “The entire team worked tirelessly to bring the guilty to the court of law. This case has set an example. It will keep the morale of the officers high and will demotivate tax evaders,” Iqbal added.
