Rs 13-cr GST fraud busted after multi-city raids by UP STF, sales tax dept

They were involved in circular trading and had shown transactions worth Rs 72.7 crore between them, on which they claimed an input tax credit of Rs 13.09 crore at 18% GST, a senior official said

The Uttar Pradesh Special Task Force (STF) and the sales tax department have unearthed a Rs 13 crore tax fraud case involving two subsidiaries of a company which carried out the embezzlement by means of bogus invoicing, officials said Saturday.

According to officials, the accused firms, RoundPay Techno Media and RoundPay Voice Tech, both registered at the same address in Lucknow, were involved in e-payment for utility services.

They were involved in circular trading and had shown transactions worth Rs 72.7 crore between them, on which they claimed an input tax credit of Rs 13.09 crore at 18 per cent GST, a senior official said.

"The STF and the sales tax department were jointly entrusted with the responsibility to probe the case, a first of its kind operation in Uttar Pradesh. This trading module was studied for 45 days. It was found that their activities were being carried out in Lucknow, Pratapgarh, Noida and Khiri also," Deputy Superintendent of Police, STF Noida, Rajkumar Mishra said.

"The firms were identified, their locations physically verified. Over 100 officers were involved in the operation," he said.

Mishra said simultaneous raids were conducted at the locations of the main companies in Lucknow and their subsidiaries in other towns by five teams comprising personnel of STF field units in Lucknow, Allahabad and Noida.

"When the investigating teams asked the companies for an invoice of the trade done between them, they failed to produce any. The system which was used by these companies for generating the invoice/bills also had no record of this trade," the officer said.

"The director of the parent company has admitted in writing to the probe agencies about the Rs 13 crore fraud," the DSP said, adding 6 TB (terrabyte) data has been recovered from the firms' servers in Noida and a detailed investigation of it was underway.

"The fraud amount is likely to go up, we are awaiting the details," he said, adding Mishra said no FIR has been lodged as of now neither any arrest made.