Manufacturers get a tax benefit as input credit from GST on the purchase of goods. Corrupt traders often buy fake bills to claim increased Input Tax Credit (ITC) which results in inflated turnover which would enable them to take loans from the bank.
Three businessmen Rakesh Kumar Jain (46), Vipul Dinesh Jain (39) and Manoj Sharma (49) generated bogus invoices to avail income tax credit for their shell corporations Petrofils, Everflow, Aarudhi Impex and ASL industries.
As stated in Mumbai Mirror, explaining the modus operandi, officials said the accused floated these companies under the proprietorship of employees and agents. They would use these companies to increase their turnover by issuing bogus invoices to their other firms enabling them to avail ITC. These firms would further issue more invoices to legitimate firms for additional Central Value Added Tax (CENVAT) credit.
CENVAT credit is a central excise credit availed on purchases for the manufacture or duty paid in relation to the manufacture of a product. The officials said that the entire chain of operation was only on paper and that there was no actual transportation, production, supply or receipt of any goods on the ground.
The three accused have been booked under the CGST act and the alleged mastermind Rakesh's brother Pinkesh has fled.
Manufacturers get a tax benefit as input credit from GST on the purchase of goods. Corrupt traders often buy fake bills to claim increased Input Tax Credit (ITC) which results in inflated turnover which would enable them to take loans from the bank.
Three businessmen Rakesh Kumar Jain (46), Vipul Dinesh Jain (39) and Manoj Sharma (49) generated bogus invoices to avail income tax credit for their shell corporations Petrofils, Everflow, Aarudhi Impex and ASL industries.
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As stated in Mumbai Mirror, explaining the modus operandi, officials said the accused floated these companies under the proprietorship of employees and agents. They would use these companies to increase their turnover by issuing bogus invoices to their other firms enabling them to avail ITC. These firms would further issue more invoices to legitimate firms for additional Central Value Added Tax (CENVAT) credit.
CENVAT credit is a central excise credit availed on purchases for the manufacture or duty paid in relation to the manufacture of a product. The officials said that the entire chain of operation was only on paper and that there was no actual transportation, production, supply or receipt of any goods on the ground.
The three accused have been booked under the CGST act and the alleged mastermind Rakesh's brother Pinkesh has fled.
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