According to an official statement released by DGGI Bhopal Zonal Unit on Wednesday said that the GST intelligence officials have detected over Rs.17 Crores tax evasion by a major cement manufacturer in Satna and arrested one of its directors.
The officials have also conducted multiple searches in the states of Madhya Pradesh and Uttar Pradesh from August 5 to August 11 at various premises belonging to the cement manufacturer located at Maihar, Satna and their registered dealers and distributors, the statement further said.
Directorate General of GST Intelligence (DGGI), Bhopal zonal unit issued statement stated, “Searches have indicated that substantial quantities of cement and clinker have been supplied clandestinely without payment of Goods & Service Tax (GST) in the states of MP and UP.”
It also said that around 28 searches were conducted at Maihar, Satna, Allahabad, Kushinagar, Agra, Kanpur and New Delhi in a span of one-week-long operation.
The statement said, during the factory search on Saturday, the team of DGGI officials was surrounded by a mob of people who threatened and interfered with the official proceedings.
“Immediate assistance from Madhya Pradesh Police was requested which was spontaneously provided. Subsequent operation was conducted under the security cover provided by the Madhya Pradesh Police,” it stated.
The statement further said that during the operation it has been revealed that more than 4 lakh Tons of limestone have been procured more than what has been declared in the formal records of the company during the period from January till July 2020. By suppressing the procurement of limestone, the company appears to have manufactured cement and clinker which has been supplied clandestinely to various dealers and units in Madhya Pradesh and Uttar Pradesh without the payment of the GST.
DGGI said, “In this process, as per preliminary estimates about Rs. 15.1 crore of GST is suspected to have been evaded during the seven-month period from January till July 2020.”
The DGGI officials also recovered cash transaction private records from company officials revealing unaccounted cash credit of more than Rs 7.5 crore for few months in the year 2018, the statement said.
More than 12 lakh cement bags were found short in stocks when compared with the formal records maintained by the company, it said, adding that these are also suspected to have been supplied clandestinely without payment of GST.
The GST implication on these transactions is estimated to be about Rs 2.1 crore, it said, adding that unaccounted cash of Rs 52.39 lakh was also recovered by the central GST officials during the searches.
Given the serious offences committed and the shreds of evidence collected, two directors of the company were identified as the organiser and financial beneficiary of this GST evasion case.
“One of the directors has been arrested on 12th August 2020 under the provisions of Central GST Act, 2017,” the statement said.
Another director did not join the investigations despite being summoned for three times, it said.
The DGGI said, “He produced a medical opinion regarding COVID-19 symptoms. However, he has now absconded and is being traced by the officials.”
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