Biggest GST Fraud Unveiled: Mumbai Firm Siphoned Off Rs 173 Crore Using Fake Invoices!

The company also gave fake invoices which showed Rs 47 crore as GST paid by them.


Biggest GST Fraud Unearthed In Mumbai

Goods and Services Tax (GST) regime came into force starting July 2017. It is not even a year, and Income Tax sleuths have unearthed the largest GST related fraud in India.

Rs 173 crore was syphoned off using fake GST invoices, by a Mumbai based firm. Owners have been arrested.

How did this fraud materialise?

GST Fraud Worth Rs 173 Crore: Modus Operandi

Mumbai based Horizon Outsource Solutions Private Limited was successful in claiming GST Credit worth Rs 80 crore from the Income Tax Dept., without paying a single penny in tax.

Since July 2017, this company was showing fake invoices of software services rendered by Asad Anwar Sayed of Best Computer Solutions Private Limited. There was no software service provided, and the invoices were never paid.

Besides, Horizon Outsource also gave fake invoices which showed Rs 47 crore as GST paid.

Amit Upadhyaya, owner of Horizon Outsource Solutions Private Limited has been arrested by The Directorate General of Goods and Services Tax Intelligence (DGGSTI).

One of the sources said,

“The agency has found that Horizon Outsource has issued and received fake invoices of about Rs 127 crore. While the case is still under investigation, Upadhyay may have also used bogus invoices to increase the turnover of his company and in turn, increase his borrowing capacity from the banks,”

Horizon Outsource was established in March 2011 and had authorised share capital and paid-up capital of Rs 10 crore each. Sayed, the other director of Horizon has also been arrested.

As per some sources, this is just the tip of the iceberg, as the firm can be involved in money laundering as well.

Has GST Halted Patanjali’s Growth?

Meanwhile, in a surprise development, Patanjali has accused GST regime of halting their amazing growth.

Patanjali is expected to report a marginal increase in revenues, which would be much lower than Rs 20,000 crore revenues which they were expected for FY 2018.

Acharya Balkrishna, managing director of Patanjali minced no words when he said,

“Lingering effects of the demonetisation and the implementation of goods and services tax (GST) impacted growth.”

On the other hand, experts are stating that besides GST and demonetisation, Patanjali hasn’t been able to manage logistics and distribution, which slowed down their growth.

Sachin Bobade, an analyst with the Mumbai-based Dolat Capital Market said

“Besides, the company’s distribution and supply chain was not efficient enough to handle the volume. It expanded too fast. Also, there has not been much innovation. The company can’t grow beyond a point riding on just brand Ramdev.”

Last year, Patanjali clocked Rs 10,561 crore revenues, which was expected to cross Rs 20,000 crore this year. Patanjali spokesperson S K Tijarawala has expressed confidence that they will bounce back, very soon.

He said, “Patanjali will do wonders in future like it did in previous years,”

Do you think GST is to be blamed for the mediocre growth in Patanjali’s revenues?

Do let us know your views, by commenting right here!

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