Crackdown on bogus dealers in Delhi; Rs 128.30 cr blocked

New Delhi, July 10 (IANS) Delhi's Department of Trade and Taxes has cracked down on bogus GST registered dealers involved in the issuance of fake invoices and has blocked suspicious input tax credits (ITC) of Rs 128 crore, the Delhi government said on Wednesday.

The steps were taken on the directions of Delhi Finance Minister Manish Sisodia, who reviewed the situation twice in the last one month and ordered the strictest possible action, to eliminate the use of fake invoices from Delhi which is defrauding the government of revenue as well as spoiling the healthy trade practices in Delhi. 

"As the first step, the Department of Trade and Taxes has identified around 56,000 suspicious and risky dealers on various risk parameters. The Department, through GST Inspectors, has conducted field verifications and inspections of 16,141 suspicious dealers so far. 

"Out of it, 4,618 dealers have been found non-existing/bogus during inspections. These dealers are non-existing/bogus dealers who got registration in GST to defraud the government exchequer by issue and use of fake invoices," the government said in a statement.

After identification, departmental officers -- Assistant Commissioners and GST Officers -- have started taken stern action against these dealers in accordance with the provisions of the GST Act and Rules.

"Registration of 1,282 dealers has been cancelled so far on this account and show cause notices for cancellation have been issued to 3,221 dealers, of which proceedings are still underway. Besides it, 887 dealers are under the jurisdiction of Central Tax Authorities. 

"Therefore, required reports/information have been sent to them for taking further necessary action as per law. ITC of Rs 128.30 crore has been blocked in respect of 1,526 non-existing/bogus dealers so far, so that these dealers could not be able to avail the ITC wrongly," the statement said.

Besides, the state tax officers have also started field verifications and inspections of all the dealers who have made transactions from these bogus/non-existing dealers and required action including the cancellation of registration of such dealers is being taken in this cleanup exercise. 

A large number of GST fraud cases involving the use of fake invoices for wrong availment of Input Credit (ITC), which is further used to pay GST on Outwards Supplies has been detected since the rollout of GST by the Trade and Taxes Department of the Delhi government, responsible for the implementation and enforcement of the GST Act in Delhi.