GST evasion caught: Madhya Pradesh cement company exec arrested for crores of rupees of fraud

By: |
August 12, 2020 5:43 PM

Substantial quantities of cement and clinker have been supplied in an illicit way without payment of GST in the states of MP and UP.

GST evasion, GST, tax evasion, cement maker, cement manufacturerMore than four lakh tons of limestone have been procured in excess of what has been declared in the company’s formal records from January-July 2020.

GST intelligence officials in Madhya Pradesh have uncovered a tax evasion of Rs 17 crore in a search operation. This time, a major cement manufacturer in Satna was involved in the GST evasion; the officials have arrested one of its directors, PTI reported. The official statement said that the searches have indicated that substantial quantities of cement and clinker have been supplied in an illicit way without payment of GST in the states of MP and UP. It was also revealed that more than four lakh tons of limestone have been procured in excess of what has been declared in the company’s formal records from January-July 2020.

The GST intelligence said that by suppressing the procurement of limestone, the company must have manufactured extra cement and clinker, which has been supplied clandestinely to various dealers and units in the two states without the payment of the GST. According to the preliminary estimates, GST evasion of nearly Rs 15.1 crore is suspected during the period. The findings also included the shortfall of over 12 lakh cement bags in stocks when compared with the formal records maintained by the company. Adding to it, the officials also recovered cash transaction private records from company officials revealing unaccounted cash credit of more than Rs 7.5 crore for a few months period in the year 2018, which had the GST implication of about Rs 2.1 crore. 

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In a rare case, the DGGI officials were surrounded by a mob of people who threatened and interfered with the official proceedings, the statement said. Consequently, the officials had to call the local police and the operation was conducted under the security cover. Meanwhile, in the month of June, the GST Intelligence had arrested three persons for allegedly evading tax of Rs 225 crore in the nine months by clandestinely manufacturing, supplying, and selling pan masala and tobacco products in Indore. Tax evasion over the past two years was suspected to be about Rs 400 crore.

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