Excise raids on 6 firms in tax scam

Aman Sood

Tribune News Service

Patiala, June 18

The Excise and Taxation Department on Monday raided five firms in Mandi Gobindgarh and one in Khanna in connection with the multi-crore tax scam.

The firms include M/s Vardhman Adarsh Ispat Pvt Ltd, M/s Samana Ispat Pvt Ltd, M/s Baba Steel Industries, M/s Friends Industries, M/s Jandu Steel & Agro Industries and M/s Bharat Ispat.

The move comes after businessmen involved in the scam failed to claim confiscated goods, fearing departmental action.

Investigations revealed that iron and steel billets worth over Rs 100 crore were brought to the state on fake GST bills from firms in Chhattisgarh and Jharkhand and supplied further on fake bills. Last week, the department had impounded 23 vehicles loaded with goods and found tax evasion to the tune of crores of rupees. Nine vehicles were loaded with finished goods from Mandi Gobindgarh, while the others were carrying iron scrap. Officials feel that the scam is just the tip of the iceberg. Some traders are allegedly using middlemen to evade tax by issuing fake bills. These bills do not have the GST registration number of a dispatcher or a recipient. “Through trade marks on goods, the department managed to identify six manufacturing units,” sources said.

The investigation wing, headed by Kumar Saurabh Raj, Additional Excise and Taxation Commissioner, said, “The bills found in the vehicles were without any serial number and those were not e-way bills.”

About 12 Ludhiana-based companies are under investigation for allegedly buying GST (Goods and Services Tax) bills from retailers of paint, cement, hardware, hand tools, iron and steel at just 4 to 6 per cent GST charged (on these items, the GST charged is between 18 and 28 per cent).

Modus operandi

• Traders import goods worth crores using fake bills 
• Bills are used to dodge officials
• In certain cases, firms mentioned on the bills do not exist, while in others, companies have no idea that their names are being used to import iron and steel scrap
• Iron and steel billets are brought to Punjab on fake GST bills from firms in Chhattisgarh and Jharkhand
• These are then loaded onto vehicles against fake bills
• Once trucks are confiscated, officials wait for owners to turn up, but no one claims the vehicles, fearing action, heavy penalty
• Bills with officials do not have a GST registration number