Assam GST searches Bharatiya Jalpan; contractor in Rs 5.34 cr ITC probe

Assam's State GST Department has opened two separate actions in Guwahati this week: overnight searches at a popular food chain and an investigation into a government works contractor accused of claiming input tax credit (ITC) through fake taxpayers.

Neither case has led to an official finding so far, and the department has not issued a public statement on either.

Bharatiya Jalpan: overnight searches

A large team of State GST officials, backed by police, searched outlets of the food business Bharatiya Jalpan through the night of October 28-29, Pratidin Time and The Sentinel reported. The teams covered branches at Christian Basti, Fancy Bazar (near Railway Gate No. 3) and Kumarpara, and the company's factory at Amingaon, according to the reports.

Officials spent several hours at the Christian Basti outlet. They reportedly took electronic devices and collected documents and records for examination. Staff were asked to assist during the operation.

The searches were reportedly prompted by suspected discrepancies in the business's accounts over roughly five years. The nature of the suspected irregularities and the amount involved, if any, have not been established, India Today NE said on Saturday. The material is being examined.

Bhagya Traders: Rs 5.34 crore ITC under scrutiny

Separately, the GST Intelligence and Enforcement Unit, Assam, has been investigating M/s Bhagya Traders, a works contractor based at Last Gate in Dispur, since October 29, The Sentinel reported.

Preliminary findings, according to the paper, suggest the firm availed ITC of about Rs 5.34 crore from around 20 suspected fake taxpayers. Investigators are examining its dealings with Trishna Barman and Hrishikesh Kalita, two people arrested earlier by the GST department in a fake ITC racket, Pratidin Time reported.

The firm executes contracts for departments and agencies including the Railways, the Public Works Department, the Water Resources Department and the Jal Jeevan Mission, The Sentinel said. The proprietor, in whose name the firm is registered, has been summoned to appear before investigators. The paper also said the role of a chartered accountant is likely to be examined. These are allegations at an early stage, and no charge has been filed.

What input tax credit fraud means

Under GST, a business can reduce the tax it owes by claiming credit for tax already paid on its purchases. In fake ITC schemes, invoices are raised by shell or non-existent suppliers so that a firm can claim credit without any real purchase, cutting the tax it actually pays to the government.

NEInsider will update this story if the GST department releases its findings.