• Notification Date: 01-03-2023
• Notification No: N/A

Gujarat ranks Fourth in the Great GST Scam

The implementation of the Goods & Service Taxes (GST) is fiercely debated, but it’s earning infamy for organised and, many a times, tax evasion through unscrupulous methods. Many businesses are using counterfeit Aadhar and voter cards to circumvent the system through devious routes and gain unlawful tax credits. 

The Citizen Facilitation Center, the centre for Aadhar and voter card, is taking cognisance of the way Aadhar is being exploited. 

According to the information presented in the Parliament through the Union Ministry of Finance, Gujarat registered 2848 cases of GST fraud from 2017-18 to 2020-21 (figures updated till January 2021). Delhi had registered 3295 cases followed by Tamil Nadu (3220), Maharashtra 3195, and Gujarat. 

Recently, the Gujarat State GST Department exposed a scam where 1,500 Aadhar cards were used for fake GST registration numbers in last eight months. 

Furthermore, a spot investigation of suspected firms was conducted in Surat, Bhavnagar, Ahmedabad, Anand district and Rajkot. During the operation of over 75 firms in Surat, it emerged that 61 firms created duplicate documents of Aadhaar and PAN cards using an Android mobile application. In Ahmedabad, 12 out of 24 firms that were investigated were involved in similar illegal operations. 

A resident of Surat’s Palitana was astonished when it emerged that an unknown mobile number was linked to his Aadhar. An investigative officer informed him that there was no information about the GST registration and PAN number received in his name. An auto driver told the Vibes of India that he wasn’t even aware that a firm was running in his name. 

We may recall that Mohammad Abbas Shabbira, arrested in Gujarat’s famous 700 crore GST scam, adopted a similar technique. He had created 121 fake firms using documents of others. 

In the last four years, the Gujarat State GST Department has unearthed at least 10 such cases in which fake companies were formed collectively. 

CA Prakash Kapuria reminds that physical verification was not part of the processes when GST was implemented in 2017. GST was allotted based only on applications. Consequently, tax evasion was done on a massive scale. The Aadhar cards of many and uneducated people have been conveniently misused. Now, with e-verification becoming mandatory, there are greater controls, though the system needs to be fool-proof.