Case will now undergo further scrutiny to determine the exact nature of the business activities

In a significant breakthrough, officials from the Jalandhar mobile wing of the GST department have uncovered a major case of GST refund fraud involving the creation of counterfeit businesses. The culprits involved neither engaged in purchasing nor selling any goods. Instead, they devised a sophisticated scheme by establishing 144 fictitious firms using fraudulent documentation. Shockingly, all these entities shared a single registered mobile number, which ultimately led to the exposure of the illicit operation.

The fraudulent activities revolved around the manipulation of invoices between the different bogus firms. The individuals behind this racket simulated a non-existent garment manufacturing business, wherein they deceitfully portrayed the sale of exported garments from Jalandhar to Ludhiana and subsequently to Dubai. Based on this fictitious turnover, they fraudulently applied for GST refunds. However, when tax records were thoroughly scrutinized by the department, the entire scam was brought to light.

The Jalandhar mobile wing initially intercepted a truck carrying a substantial stock of ready-made garments being exported by one of the implicated firms. This discovery paved the way for further investigations, leading to the unravelling of the intricate web of fraudulent practices. In a remarkable development, a record-breaking fine of Rs 3.65 crore has been imposed in this case, marking the highest penalty ever imposed on a single vehicle in Punjab.

The Intelligence and Preventive Unit of the GST department dedicated several days to analyzing the stock bills found in the seized truck, along with the available business data. It was uncovered that these counterfeit firms were generating invoices in each other's names, indicating a complex network of fraudulent transactions. Moreover, it was discovered that all 144 firms shared the same mobile number, while their registered owners possessed different addresses and identification documents, including Aadhaar cards. The investigation revealed that the claimed purchase and sale of readymade garments were based entirely on falsified documentation.

The case will now undergo further scrutiny to determine the exact nature of the business activities reported by each firm and to ascertain the validity of the GST refunds claimed. It is anticipated that this investigation will potentially unveil significant instances of tax evasion. Furthermore, the GST refunds of all those entities conducting business with fictitious firms are likely to face thorough examination.