The Commercial Taxes department has unearthed an over ₹1,000-crore GST fraud in refunds and input credit tax (ITC) cases after the Congress party came to power in Telangana. And this could be just the tip of the iceberg, informed official sources on Monday.
Preliminary desk audits by senior CT officials have exposed fraudulent refunds and input tax credits which it appears was deliberately suppressed by the previous regime. But, with Chief Minister A. Revanth Reddy giving a free hand to tax-generating departments to find ways and means to increase tax revenues, CT officials have been going through the cases with a fine tooth comb.
At least a dozen companies are said to be under the scanner for fraudulent refund cases while another 51 cases are under various stages of investigation in different divisions in the twin cities and across the State pertaining to the fraudulent ITC.
The total value of turnover shown by these 52 cases under investigation is considered to be ₹5,893 crore and the tax involved is ₹976 crore. All put together, so far, officials have come across fraud to the tune of ₹1,000 crore and it could be much more as investigation is under way, they said, pleading anonymity.
Giving specific examples, they charged that a few firms have been filing monthly returns in the form of GSTR-1 declaring taxable interstate transactions and passed on the ITC to tax-payers in other States.
What startled the officials was that companies have been filing false consolidated returns showing both local and inter-State sales in form GSTR3B with zero turnovers and not paying any tax declared by them as per the initial GSTR-1 return. It was also found that a few other firms, without paying tax, were irregularly transferring the ITC to other taxpayers causing a huge loss to the exchequer.
On one hand, the firms under investigation have not been paying tax due to them and on the other, they have enabled their customers to claim irregular input credit, reducing tax payable by them, thereby leading to dual loss of revenue, pointed out official sources.
IIT-Hyderabad role
Amid all this, officials were surprised to note that the Indian Institute of Technology, Hyderabad (IIT-H), which has an agreement with the department to provide IT support, and having the entire data, neither reported the systematic fraud of tax evasion or mention any deviations in its monthly report.
When this was probed further, they were shocked to come across certain fields of data masked about tax payers. When confronted, the IIT-H official in-charge is believed to have confessed about “oral instructions” from top bureaucrats in the previous regime to hide the key data input!
Adding to the intrigue is that all the five programmers were using the same system administrators login to effect changes in coding and no security audit was done on the modules so far. The department has detected huge tax evasion and the work of IIT-H is also under the scanner. The role of IIT-H has been brought to the notice of the director and a special forensic audit of application/ modules developed by institute, sources said.
When contacted, Commissioner of Commercial Tax T.K.Sridevi said a deeper probe into the fraud is under way.
