The Uttarakhand GST department exposes a group that used gst fake invoice to legalise the sale of illegal wood and avoid tax worth crores. According to officials, a group of traders who would set up fictitious companies to provide a legal cover for their unlawful trade in timber and related products and escape GST amounting to crores of rupees have been caught by Uttarakhand tax authorities using digital tracking and electronic surveillance. According to them, the Uttarakhand GST department began a massive search and seizure operation called “Operation D Day-Rising Woods” to find the scam in the Jaspur neighbourhood of the Udham Singh Nagar district.
One of the largest timber marketplaces in the nation, Udham Singh Nagar provides wood and its products to markets all over the nation.
Investigators believe that residents of other states, including Uttar Pradesh, Haryana, Delhi, Bihar, and Rajasthan, are involved.
Throughout the course of the operation, 27 teams made up of more than 300 tax and forensic officials as well as experts in financial technology raided 27 businesses and the homes of transporters, attorneys, and chartered accountants.
The investigators, who have been pursuing these criminal networks for the past nine months, discovered numerous businesses registered in one person’s name that were created with the express intent of deceiving the tax authorities.
They contend that since the GST regime’s inception in 2017, the defendants have been working on a scheme to defraud it by giving fictitious businesses legal protection so they may claim to have bought raw materials on the black market.
Investigators believe that bank employees may have assisted the suspects in creating accounts without following the necessary KYC procedure. According to officials, the network consisted of 25 to 30 influential individuals who colluded with one another.
Ranveer Singh, a joint commissioner of the Special Investigation Bureau, said in an interview with PTI: “The strategy was to first launch fictitious businesses that operated solely on paper. Timber-related businesses were obtaining raw materials from the black market and passing the phoney companies off as their real suppliers by receiving purchase orders and invoices from them. They gave these fictitious businesses input tax credits, which resulted in a large loss for the government.”
“It was discovered during the initial investigation that a syndicate was involved in forming phoney firms by exploiting the paperwork of others and reportedly causing substantial loss of money,” Singh added.
He continued by saying that the nexus was responsible for transferring phoney input tax credits to Yamunanagar in Haryana, Bijnor, Rampur, Moradabad, and Saharanpur in Uttar Pradesh by creating phoney invoices without really supplying the items to those locations.
The turnover is initially projected to be above Rs 100 crore, with over Rs 18 crore in tax evasion.
On March 4, the search and seizure operation began at 11 a.m. and went on until late at night. Rajneesh Yashwasthi, deputy commissioner of the Special Investigation Bureau, said that teams have taken a lot of documents, electronic devices like cell phones, laptops, and tablets, stamps, bill books, debit and credit cards, chequebooks, and signed blank cheques.
“We asked forensic experts for help to check the data that was taken from the devices. During the operation, Rs 7 lakh in cash was also taken. With the help of the district administration, locked businesses and places of business that weren’t registered have been shut down “he added.
The operation was started after Commissioner of Tax for Uttarakhand, Ahmed Iqubal, gave the order. Additional Commissioner for Kumaon, B S Nagnyal, was in charge on the ground.