40 industrialists of induction and furnace biz rue GST notices over bogus billing

The Induction Furnace Association of North India is perturbed over regular notices being served on them by the Central and state GST Departments. About 40 industrialists representing the industry in Ludhiana are perturbed as they are being asked to pay GST, which, they claim, had already been deposited with the scrap dealers from whom they had purchased stocks. Their concern is that if certain scrap dealers have claimed GST through bogus billing or are defaulters, then genuine industrialists should not be penalised for no fault of theirs.

Talking to The Tribune, Dev Dutta, general secretary of the association, said that a few black sheep in the trade had claimed GST by presenting fake or bogus bills and were already on the radar of GST sleuths. “But that does not mean all industrialists in the trade are conducting business in the same unethical manner,” he added.

“The genuine furnace and induction industries are also receiving Central and state GST notices to deposit GST along with penalties and interest. We have already paid 18 per cent GST to the dealers when we procure scrap. Now, if these dealers indulge in unethical practices, evade taxes or claim GST on bogus bills, we should not be punished unnecessarily. The department issues them GST numbers — it is their duty to verify credentials because we provide all e-way bills, vehicle numbers, pictures, etc. Due to this bogus billing scam, running into several crores, the genuine induction and furnace industry is suffering,” said Dev Dutta.

Another industrialist, KK Garg, said that tax evasion was happening with impunity because the GST on MS scrap was 18 per cent, which was a huge amount. “If the government brings it down to 5 per cent, there would be no need to evade GST and it would be paid honestly. But presently, 9 per cent GST is imposed by the Central government and another 9 per cent by the state government, totalling 18 per cent,” he said.

According to information, an office-bearer of another furnace association was allegedly involved in the bogus billing scam and was on the radar of the GST Department. His premises had also been raided by GST teams. Keeping this in mind, the Induction and Furnace Association here convened a meeting, in which an appeal was made to the GST Department to withdraw the show-cause notices.

The industrialists maintained that the notices required heavy pre-deposits, blocking working capital and risking loan defaults, especially when many had already paid their suppliers. Being made to pay extra GST to the department now, they said, was unjustified.