4 shell firms in Hajipur under lens as taxmen bust GST racket

The Bihar government’s commercial tax department has unearthed a big racket allegedly involved in generating e-way bills for fraudulent transactions in Hajipur town of Vaishali district.

It has identified four fake firms, which were allegedly working as shell companies for various traders based in New Delhi and Haryana to help them evade input tax of the Goods and Services Tax (GST).

According to officials, the four firms have shown trading of goods worth Rs 214 crore in the last few months by generating e-way bills, but no actual sale and purchase of goods took place. The four fake firms have been identified as Manish enterprises, Navin Enterprises , Sunil Enterprises and Malak Data.

Raids were conducted at the locations of these by commercial tax sleuths on Thursday evening and Friday.

Confirming the raids, Pratima S Kumar, secretary, commercial tax department, said the raids had revealed fraudulent transactions and false credit claims by the firms, which have links with traders in New Delhi and Haryana.

“We are trying to get in touch with officials of other states to unravel the modus operandi of these fake firms. We suspect the firms were engaged in circular trading and working for big firms just to evade tax,” she said.

Sources in the department said the raids were carried after the central intelligence wing of the department got wind of fraudulent transactions by firms in Hajipur a fortnight back.

Sleuths started monitoring the movement of trucks hired by these firms and gathered information that these trucks were carrying goods much lower in quantity than shown in e-way bills generated for inter-state movement of goods. The firms used to generate e-way bills for shipment of readymade garments, iron and steel products and sports goods from other states, a source said.

“All the four firms were working as briefcase companies having no registration for trading of goods or past record of manufacturing goods. We have evidence that these firms were working as shell companies for big companies based in Haryana and New Delhi so that the bigger entities could evade input tax on goods purchased by them,” said a senior commercial tax officer.

Further, the raids have revealed the firms were running from a fake address and paying electricity bills under fake names. “This is the first major busting of a racket in fraudulent transactions of goods by generating e-way bills in Bihar. It shows how traders are adopting new methods to evade taxes after imposition of GST,” said another official of the commercial tax department.

Last year, the commercial tax department had raided marble stone dealers and biscuit wholesalers after getting information that they were bringing in goods from others states without valid e-way bills.

Post-GST, the commercial tax department is under pressure to increase tax base in the state so as to meet the annual revenue target, which is more than Rs 25,000 for fiscal year 2018-19.

First Published: Jan 12, 2019 15:44 IST

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