The detection of fraud has resulted in saving the exchequer over Rs 350 crore of refunds, they added.
Revenue Department using its data analytics has discovered a fraud in GST refunds with as many as 1,200 exporters, who have have claimed Rs 350 crore refunds, are now untraceable. The department has reasons to consider that nefarious elements among the customs broker community may be connected with these frauds, involving fictitious entities, existing only in virtual space through identity thefts with fake and morphed documents, according to sources.
The detection of fraud has resulted in saving the exchequer over Rs 350 crore of refunds, they added. Central Board of Indirect Taxes and Customs has obligated customs brokers under their licensing conditions to independently verifying the KYC of exporters, the sources noted.
However, going by the cases detected in recent months, at least 50 customs brokers have been found to have dealt by and large with such exporter entities which are untraceable at their registered addresses and such custom brokers are also under the lens, the sources said.
As investigators probe deeper, newer modus operandi are surfacing, they said, adding that a company by the name of SSR Export was investigated and led to discovering a fraudulent refund claim of Rs 9.88 crore.
As per the investigation, the firm was ostensibly exporting readymade garments to an special economic zone (SEZ). Now, with newer techniques of data analytics-based risk management being available to officers, the taxpayer was selected for physical scrutiny and found non-existent at his declared address, they noted.
Using a web of fake invoicing of over Rs 847 crore, the firm created a fraudulent credit of Rs 195 crore and investigations led to discovering untraceable suppliers. Department of Revenue is carrying out continuous risk evaluation of exporters with the help of predictive modelling, the sources said, adding regular strategy meetings are being held at a very high level by the Revenue Secretary himself with data analytic experts, state and centre tax investigators.
Over 800 entities have been interdicted during the last five months while exporting overvalued merchandise of Rs 1,500 crore to claim fake IGST refunds have been suspended in these cases.