Chandigarh
In the last six months, at least 333 fake private companies have been detected and their Goods and Service Tax Identification Number (GSTINs) cancelled, by the UT Excise and Taxation Department in Chandigarh. These companies were registered through the GST portal of UT administration in the last eight months between January to August, and the practice of identifying them began in July, 2019.
Interestingly, six companies out of the 333 were found causing a loss of around Rs 70 crore to the UT administration. As many as 17 companies, which fall under the purview of Central Excise and Taxation Department, were also identified. Recommendations for the cancellation of these 17 companies were sent to the Central Excise and Taxation Department.
“The practice of identifying the bogus firms began after receiving instructions by the Central government. During this process, six bogus companies, which did not exist at their registered addresses were found causing a loss of over Rs 70 crore to UT administration by submitting fake invoices of sale/purchase for encashing the Input Tax Credit (ITC). Criminal complaints were moved against five companies out of six. However, it was not established that the 310 fake companies caused any losses to the UT administration. We simply cancelled their GST numbers,” said sources.
Since after the implementation of GST in July 2017, hundreds of companies had applied for GST numbers with the UT administration. A registered company can obtain GST number by sending an online application to the Excise and Taxation Department. The 333 companies were found registered throughout Chandigarh including residential addresses in various villages and colonies.
“We started checking the registered addresses of these companies after receiving feedback from the central government and neighbouring states. FIRs were lodged against the companies which caused loss to the UT administration. We are yet to receive any followup about 17 companies, which come under the purview of Central Excise and Taxation Department,” said AK Chaudhary, Assistant Excise and Taxation Commissioner.
The UT administration has so far not found any negligence on the part of any employee of UT Excise and Taxation Department since after detecting 333 bogus companies including six, which caused a loss to the administration. A senior officer said, “We acted timely and identified these bogus companies. Companies, which caused losses, were already imposed heavy penalties from the date of their registration. A few of these companies are paying the penalties. So far, no connivance of any government employee came to light.”
