Mumbai: GST inspector and 16 traders booked for fraud

Five months after midday reported a suspected Goods and Services Tax GST fraud amounting to Rs 150 crore the AntiCorruption Bureau ACB has filed an FIR against a state GST inspector and 16 traders It has also come to light the value of the scam exceeds Rs 175 crore The ACB acted upon middays reports in September 2023 and October 2023 initiating its probe Following a vigilance probe by the state GST department an FIR has been registered against state GST inspector Amit Lalge 44 and 16 traders suspected of colluding with himIn its statement the ACB announced that the FIR has been filed against Lalhe and the traders under various sections of the Indian Penal Code including criminal conspiracy criminal breach of trust cheating and relevant sections of the Prevention of Corruption Act ldquoAn FIR has been lodged and we are now conducting further investigations to trace the money trailrdquo said Vijay Patil additional commissioner ACBIn a statement the ACB revealed that the scam occurred between August 2021 and March 2022 while Lalge was posted as sales tax officer at the state GST Ghatkopar division During his tenure 16 traders submitted fake documents to obtain GSTN numbers Despite not remitting any GST to the state government they filed 39 applications claiming GST refunds amounting to Rs 1759312622 in totalldquoDespite indications in the GST BO back office Portal that the taxpayers were fake he Lalge didnrsquot verify their authenticity Further instead of rejecting the applications he accepted them and hence he colluded with the traders misusing his position and causing a loss of Rs 1759312622 to the state governmentrdquothe ACB said in a statementAccording to sources the vigilance report submitted by the state GST department to the ACB showed several lapses on the part of Lalge indicating that he blatantly abused his position Sources within the ACB informed midday that as a ClassII officer Lalge was not authorised to clear return files exceeding R5 lakh However he disregarded the protocol and approved return files surpassing the limit Additionally when companies submitted foreign export details he was required to verify them by visiting the companys official address which he failed to doldquoThere is clear collusion and we suspect that substantial kickbacks were paid to him and others Currently we are tracing the money trail before making any arrests in the caserdquo said an officer The ACB is also probing why the probe was initially not reported as per the rules and came to light only after the midday reports As per the government rule the GST department should have immediately reported the fraudmdashwhich midday brought to light on September 26mdashto the policeThe fraud was detected in 2022 following which the vigilance wing was roped in to carry out a detailed probe However sources revealed that the department had refrained from registering an FIR in the matter as several members of the top brass were also suspected to be involvedAs per the investigation 16 traders from Ghatkopar and one from Kurla had been given nonrefundable returns amounting to more than R175 crore The 16 traders have registration certificates attributed to only three addresses in Ghatkopar and all the addresses mentioned by the traders were of shops that they had rented having an area of 200300 square feetThe shop owners were fictitious and documents were forged After getting notified by the higherups on April 6 2022 the state tax commissioner formed an investigation committee headed by the additional state tax commissioner Thane region The committee established that the 16 traders had made 39 refund applications for the financial year 20212022 valued at more than R175 crore The applications were made under the category titled lsquoexports of goods without payment of tax and Inverted tax structuresrsquoThe investigation revealed that all the cases involving the traders from Ghatkopar had been assigned to Lalge who processed the applications made to the GST office and sanctioned the refunds The application of the Kurlabased trader had been processed by another officer who is currently not named in the FIR As soon as the role of Lalge surfaced he was suspended in May 2022 while the other officer in question was suspended in June 202339No of bogus applications cleared