Exporters used fake invoices worth Rs 3,500 to claim ITC

In the biggest ever pan-India joint operation against fraudulent claims of IGST refunds, the Directorate General of GST Intelligence (DGGI) and the Directorate General of Revenue Intelligence (DRI) have busted a major racket of fake invoices worth Rs 3,500 crore involving exporters. Using fake invoices, the exporters are estimated to have claimed input tax credit (ITC) of more than Rs 470 crore which was further utilised. The agencies have intercepted live export consignments of many exporters at the Vadodara Rail Container Terminal, Mundra port and Nhava Sheva port for examination in order to ascertain mis-declaration.

The two agencies carried out search operations at 336 different locations across the country. The operations covered entities in over a dozen states, including Gujarat, Maharashtra, Delhi, Haryana, Uttar Pradesh, West Bengal and Karnataka.

The case involves a large number of exporters sending out goods on payment of integrated GST (IGST) almost entirely out of the ITC availed on the basis of fake invoices.

"The joint operation of the two premier intelligence agencies of Central Board of Indirect Taxes and Customs (CBIC) was a first of its kind in the history of CBIC, which involved about 1,200 officers from both the agencies," a Finance Ministry statement said.

The search operations were carried out based on the data analytics and intelligence gathering by the DGGI and DRI, two premier agencies specialising in economic offences.

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"It was also noticed that there was no or negligible payment of tax through cash by the exporters as well as their suppliers. In few cases, even the tax paid through ITC was more than the ITC availed by these firms. On the basis of this intelligence, massive searches were conducted on the premises of exporters and their suppliers," the statement said.