At a time when many Indian apparel exporters are struggling to cope with the various challenges of GST, there are some companies that are misusing the same.
The Government authorities have come up with strong action against these firms.
Delhi-based Aastha Apparels Pvt. Ltd. & others have fraudulently claimed IGST refunds on export of goods to the tune of more than Rs. 61 crore. Directorate General of GST Intelligence (DGGI) has registered a case against the firm for fraudulently claiming IGST refunds on export of goods.
Two directors of aforesaid exporter companies have been arrested under various sections of CGST Act 2017. Investigations in the matter are in progress, as the role of suppliers and other persons associated with these exporters is under investigation.
The said organisations also did not have commensurate purchases backwards. The supplier companies to these exporter firms are controlled and managed by few persons only and they are also involved in claiming of suspect IGST refunds. These companies have created a complex web of circular trading among themselves without commensurate payments or actual supplies of goods to pass on ineligible input tax credit (ITC) to the exporters.
The Government officials revealed that ITC has been fraudulently availed by Aastha Apparels Pvt. Ltd. & others on the basis of invoices received from non-existent/non-functional firms/companies or from companies that have indulged in circular trading.