Goods and Services Tax (GST) authorities have discovered fraudulent refund claims worth Rs 350 crore made by as many as 1,200 exporters. The Revenue Department, using data analytics, has stopped the refund claims since the exporters were untraceable.
Sources said nefarious elements among the customs broker community may be connected with these frauds, involving fictitious entities, existing only in virtual space through identity thefts with fake and morphed documents. The detection of fraud led to saving the exchequer over Rs 350 crore of refunds, they added.
The Central Board of Indirect Taxes and Customs has obligated customs brokers under their licensing conditions to independently verifying the KYC of exporters, sources noted. However, going by the cases detected in recent months, at least 50 customs brokers have been found to have dealt by and large with such exporter entities which are untraceable at their registered addresses and such custom brokers are also under the lens, the sources said.
A company was investigated and led to discovery of a fraudulent refund claim of Rs 9.88 crore. As per the investigation, the firm was ostensibly exporting ready-made garments to an SEZ.
GST authorities, using data analytics-based risk management, selected the taxpayer for physical scrutiny, who was then found non-existent at his declared address, they noted.
Using a web of fake invoicing of over Rs 847 crore, the firm created a fraudulent credit of Rs 195 crore and investigations led to discovering untraceable suppliers.
The Revenue Department is carrying out risk evaluation of exporters with the help of predictive modelling, sources said.