The Odisha High Court on 27 July had rejected bail petition Amit Beriwal, accused of committing GST fraud. The State exchequer incurred a huge loss of Rs. 122.67 crores due to the fraud committed by fake and fraudulent transactions of the accused. In response to the rejected bail petition, the HC has raised serious concerns over the ever increasing cases of Goods and Service Tax (GST) fraud cases that involve creation of fake and non-existent firms which directly hamper the revenue collection by the state.
Lawyer S. Mohanty while fighthing the case on behalf of Mr. Beriwal pleaded that his client was not involved in the matter and was arrested without notice. Prosecutor Sunil Mishra, on behalf of the government, argued that Amit had been arrested after receiving all the evidence and due process followed during the arrest.
Justice SK Panigrahy said,”One cannot turn a blind eye to the fact that the concept of GST in the current context is relatively new and still needs time till it is fully understood.But it is a matter of great concern that many fraudsters are taking the advantage of this plight and dampening the spirit of the implementation. Such defaulters need to be dealt with stringent actions.” Panigrahy also added that there are certain inherent flaws in the execution of GST system that give chances for the fraudsters to commit immoral acts. Moreover, ingenious methods are being employed for all electronic transactions.
Many fake firms have been mushrooming in the state. All over the nation, many people have fallen in traps of these fraudulent firms. A large number of cases have emerged where fraudsters with vested interest have created a host of unscrupulous and bogus entities. The sole purpose of these firms is to indulge in issuing of false and fabricated invoices without actual movement or supply of goods and services and without having to pay any GST to the public exchequer. Instead they claim Input Tax Credit by defrauding the revenue. Input Tax Credit (ITC) is an option in GST which allows the traders to claim credit for taxes paid on purchase.