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Rs 230-crore GST scam by Tamil Nadu steel traders unearthed

The state commercial taxes department has blown the lid off a Rs 230 crore scam involving Salem-based steel traders Mahendra Kumar Singhi and wife Suman, owners of Steel Hypermart India Pvt Ltd, and chartered accountant Mukesh Surana, who allegedly claimed several crore rupees as input tax credit by producing fake invoices of steel trading. This is believed to be one of the biggest GST frauds detected in the state.

‘Loophole in GST software reason for malpractice’

“Surana was helping them claim input tax credit in the name of five companies. Some companies which were actually trading in steel also used fake invoices, our investigation revealed,” the official said.

The department has sealed the offices and residential premises of the accused in Hosur, Bengaluru and Salem.

The department is likely to lodge a complaint with the Institute of Chartered Accountants of India against Surana for his involvement in the racket.

At present, GST software does not match purchases and sales.

“This loophole has been one of the main causes for traders claiming input tax credit using fake invoices. For every sale, there should be a purchase. But at present, we are not able to ascertain it using the software. We are trying to fix this problem and by June, a new software will be rolled out,” said the official.

The commercial taxes department has also developed its own software to scrutinize returns filed by assessees periodically.

Regards,
C