The Commercial Taxes department has reportedly uncovered a GST fraud exceeding Rs 1,000 crore in refunds and input tax credit (ITC) cases after Congress came to the power in Telangana, The Hindu reported.
Senior officials’ preliminary desk audits uncovered intentional ITC suppression and fraudulent refunds from the previous regime. Under the leadership of Chief Minister A Revanth Reddy, tax-generating departments were given a free hand to boost tax revenues, leading CT officials to meticulously examine cases.
Currently, a dozen companies are under scrutiny for fraudulent refund cases, with another 51 cases under investigation across the State related to fraudulent ITC. The total turnover reported in the 52 investigated cases amounts to Rs 5,893 crore, with Rs 976 crore in taxes involved. Overall, officials estimate the fraud to exceed Rs 1,000 crore, and the investigations are still underway.
The investigation so far have discovered that companies filed fake consolidated returns with zero turnovers and failed to pay taxes as stated in the first GSTR-1 form. Furthermore, a few companies shifted ITC to other taxpayers irregularly without paying taxes, which resulted in significant losses for the government.
According to reports, the department’s IT assistance provider, Indian Institute of Technology, Hyderabad (IIT-H) neglected to include any systematic tax evasion or deviations in its monthly reports. Subsequent investigation revealed some masked taxpayer data fields that were purportedly concealed on the advice of senior bureaucrats during the previous administration.
The department is closely examining IIT-H’s involvement after discovering substantial tax evasion. A specific forensic audit of the institute’s applications and modules is under progress, and the subject has been brought to the attention of the director.
Commissioner of Commercial Tax TK Sridevi said that an in-depth probe into the fraud is ongoing.
According to highly placed sources, Union Minister for Tourism and Culture G Kishan Reddy has written a letter to the Union Minister for Education Dharmendra Pradhan, urging him to look into the alleged role of certain officials of the IIT-H in the tax fraud case.
