₹5 Crore GST Scam Unearthed in Guwahati’s Fancy Bazar
Focus keyphrase: Fancy Bazar tax evasion
In a major crackdown on tax evasion, the GST Intelligence wing in Guwahati has busted a ₹5 crore scam involving fake invoices and non-existent firms operating in Fancy Bazar. One individual has been arrested, exposing a deep-rooted racket that could have wider implications across Northeast India’s trading hubs.
What Happened in Fancy Bazar?
- DGGI (Directorate General of GST Intelligence) conducted a search operation in Fancy Bazar, Guwahati.
- Officials discovered bogus input tax credit (ITC) claimed using fake GST registrations.
- Multiple invoices were generated without actual supply of goods.
- One trader was arrested for running shell firms to pass on ineligible ITC.
- Estimated tax evasion: ₹5 crore.
Key Legal Provisions Involved
- Section 132 of CGST Act, 2017:
Deals with offences like issuing fake invoices, availing input tax credit fraudulently, and running fake firms. Punishable with imprisonment. - Rule 86A of CGST Rules:
Allows authorities to block input tax credit if there is a reasonable belief of fraud. - Relevant Case Law:
Jayachandran Alloys (Madras HC) — held that ITC can be blocked only with proper justification under Rule 86A. Authorities must follow principles of natural justice.
Lessons for Indian Traders and Taxpayers
If you are a business owner or CA handling client GST filings:
- Verify vendor GSTINs using the GST Portal before claiming ITC
- Avoid transactions without e-invoices or proper transport documentation
- Monitor GSTR-2B and reconcile ITC claims monthly
- Be cautious with agents or intermediaries promising high ITC refunds
- Conduct regular audits of GST returns, especially if operating in high-volume trading markets like Fancy Bazar
Expert View: How to Stay Safe from GST ITC Frauds
Tip from CA R. Banerjee (Efiletax Panel Advisor):
“The most common trap is dealing with vendors who don’t file GSTR-3B. Even if you have an invoice, your ITC is at risk. Use the GSTR-2B matching feature every month to protect your business from future scrutiny.”
Government Is Watching High-Risk Zones
CBIC has flagged commercial areas like Fancy Bazar in Guwahati, Burrabazar in Kolkata, and Gandhi Market in Delhi as high-risk zones for circular trading and fake billing. Businesses in such locations must strengthen their compliance systems.
Efiletax Can Help You Stay Compliant
At Efiletax, we assist traders and SMEs with:
- GST audits and ITC reconciliation
- Vendor verification services
- Monthly GSTR-1 & GSTR-3B filings
- Support during DGGI or anti-evasion notices
Summary
Guwahati Fancy Bazar tax evasion case exposes ₹5 crore GST scam using fake firms. Arrest made. Learn legal implications and compliance tips for traders.
FAQ: Fancy Bazar GST Scam
Q1. What is the penalty for fake GST invoice fraud?
Under Section 132 of the CGST Act, it can lead to imprisonment up to 5 years and heavy fines.
Q2. How to check if a vendor is genuine?
Use the GST Portal search tool to verify registration status and filing history.
Q3. What is input tax credit fraud?
Claiming GST credit without actual purchase or supply of goods/services—usually via fake invoices.