Post Sirsa trader’s arrest, cotton firms under the scanner

CHANDIGARH: The arrest of Sirsa-based trader Anupam Singla by the Directorate General of GST Intelligence (DGGI) in Delhi last week has opened the Pandora’s box regarding the buying of fake GST bills by cotton ginners and spinning mills in Punjab, especially Ludhiana.

Ruchika M Khanna

Tribune News Service

Chandigarh, July 22

The arrest of Sirsa-based trader Anupam Singla by the Directorate General of GST Intelligence (DGGI) in Delhi last week has opened the Pandora’s box regarding the buying of fake GST bills by cotton ginners and spinning mills in Punjab, especially Ludhiana.

Singla was arrested on the charges of creating 90 fake firms for the purpose of issuing fake invoices without supplying any goods. Firms opened by the trader are believed to have issued invoices worth Rs 7,672 crore, which would have otherwise attracted GST worth Rs 660 crore.

Officials in the state taxation department told The Tribune that in light of these findings, they had started investigation of cotton ginning mills and spinning mills who could have bought the fake bills from the 90-odd firms opened by Singla. These firms, especially those who have bought cotton from Haryana, for ginning or spinning into yarn, were already under the scanner for fake bills that were bought and then used by the spinning mills of Ludhiana to claim input tax credit worth crores of rupees.

The involvement of Ludhiana-based spinning mills in the fake cotton billing scam was first reported by The Tribune in January this year. The investigation by the state taxation department and the DGGI began in April and several top spinning mills in Ludhiana were made to reverse the input tax credit claimed by them, based on the fake bills purchased by them from firms floated by Singla.

Navdeep Bhinder, Additional Excise and Taxation Commissioner, Punjab, said inspection of the accounts maintained by cotton spinning mills was done by both DGGI and state taxation officials. “While top defaulters have reversed the ITC, we are now in the process of forcing the smaller firms to reverse the tax credit claimed by them by submitting fake bills,” she said.

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