The investigation wing of Punjab GST on Saturday arrested five people for creating and operating a bogus billing of Rs 700 crore in copper scrap and hosiery items across Punjab, Delhi and Haryana.
They have been accused of availing and passing on fraudulent input tax credit to the tune of over Rs 122 crore to various firms without due payment of tax to the government.
An authorisation for the arrest of seven people was issued by Commissioner (State Tax) Nilkanth S. Avhad, an official statement said.
Search and seizure operations were conducted at multiple locations in Khanna town by the teams of the department to gather evidence for establishing the modus operandi that involved creating firms in states outside and within Punjab dealing in copper scrap and hosiery items.
The input tax credit created through bogus firms was used to support the local movement of goods of traders.
The department had got alerted about the network after a vehicle carrying copper scrap was detained last year and investigation had revealed that the goods had been procured locally while as e-way and invoice were generated from some other firm.
The detailed investigation revealed a network of 44 firms spread across states that was being used to create the bogus input tax credit for setting off the tax liability arising out of purchases made from local unregistered dealers.
On being confronted with the evidence, the kingpin accepted that he was operating the network with the help of some other accomplices some of whom have also been arrested.
The total bogus billing by the network is likely to be more than Rs 700 crore while input tax credit created or availed and tax evaded is more than 122 crore, said the official statement.
The accused — Vinod kumar, Maninder Sharma, Sandeep Singh, Amarinder Singh and Sunny Mehta — were produced before the Duty Magistrate and were remanded to judicial custody for 14 days.