The ministry says that over 800 entities have been detected during the last five months.
In one of the biggest crackdowns on Goods And Services Tax (GST) evaders so far, the centre has launched an investigation against unidentified exporters who allegedly faked GST refunds worth Rs 350 crore.
“The analytics driven investigation into GST refunds have been an eye opener, with investigators discovering over 1200 untraceable exporters, and saving the exchequer over Rs. 350 crore of refunds under payment,” a Finance Ministry source told NDTV.
Sources say that the department of revenue has reasons to believe that “nefarious elements amongt the customs broker community may be connected with these frauds involving fictitious entities, existing only in virtual space through identity thefts with fake and morphed documents.”
The GST collection has been a major sore point for the PM Modi government ever since the ‘One Nation One Tax’ regime was implemented in 2017.
Sources in the Finance Ministry said that the Central Board of Indirect Tax & Customs (CBIC) had given customs brokers the liberty to independently verify KYC (know your customer) details.
“However, going by the cases detected in recent months, at least 50 customs brokers have been found to have dealt by and large with such exporter entities which are untraceable at their registered addresses. Such custom brokers are also under the lens,” a ministry note read.
The ministry says that over 800 entities have been detected during the last five months where exporters had overvalued the price of merchandise of Rs 1500 crore to claim fake GST refunds.
“Investigators are confident of battling the problem of fake invoicing through advanced data analytics. There is rich data available in GST returns and e-way bills. A long digital trail makes it difficult for fraudsters to carry on with their nefarious designs,” a source said.