The Nagpur Zonal unit of Directorate General of GST Intelligence (DGGI) detected a tremendous evasion of GST worth Rs.108 Crores by two liquor manufacturers from Aurangabad and Nanded districts in Marathwada on August 1, 2020.

DGGI additional director Pradeep Gurumurthy read from a statement released, “The officers of DGGI, Aurangabad unit, had on July 28 and 29 carried out searches on the premises of grain-based liquor, molasses-based liquor and malt spirits at Nanded. Parallel searches were carried out at a distillery in Aurangabad-based manufacturer of alcohol, which is not fit for human consumption.”

“During the searches, it was found that the Nanded-based distillery was suppressing the clearances of malt spirits by clearing them under invoices with the classification ‘0000’ to other distilleries for the manufacture of alcoholic liquor.” he also said.

The statement also stated, “The searches revealed that while the taxpayers were paying GST on a part of the clearances of alcohols not fit for human consumption, the clearances of an extremely large quantity of alcohols not fit for human consumption were suppressed and such clearances were neither being reflected in the GSTR-3B returns filed by them nor was any GST being paid on such clearances.”

“The scrutiny of documents revealed that during the period July 2017 to June 2020, the taxpayer had cleared malt spirits valued at over Rs 70.03 crore without payment of GST of Rs. 12.61 Crores leviable thereon.” was also revealed in the statement.

Also, the director said, “A thorough scrutiny of records has further revealed that the Tran 1 credits availed by the taxpayers from central excise/service tax angle that taxpayers availed inadmissible credit of Rs 14.83 Lakh on cesses, which is not allowed to be transitioned.”

The total amount payable by them under Rule 6 of the CENVAT Credit Rules, 2004 is estimated to be Rs.5 Crores.

With Warm Regards,

CL Bureau.