GST department makes one more arrest under Operation Palm Tree

Kochi, June 7, 2024 

The drive was launched on May 23 targeting scrap trade in which tax evasion to the tune of ₹209 crore was detected

The Kerala State Goods and Services Tax (SGST) department has made one more arrest under Operation Palm Tree, a drive launched on May 23 targeting scrap trade in which tax evasion to the tune of ₹209 crore was detected.

The arrested is Usman Pullakkal, an alleged kingpin of a metal scrap trade cartel in Palakkad, who is accused of tax evasion to the tune of around ₹16 crore. He was nabbed from Kochi.

A search was conducted at his house during which certain incriminating documents related to fraudulent GST registrations and transactions were seized. This breakthrough comes as a major success in the State’s ongoing efforts to dismantle organised tax evasion networks, a release issued by the SGST department said.

This was the second arrest to be made under the operation. Sandeep Sathy Sudha, one of the main accused, was arrested under Section 69 of the SGST Act on May 24.

Operation Palm Tree has already uncovered a massive tax evasion scheme involving fake invoices worth ₹1,170 crore resulting in a tax loss of ₹209 crore. It unearthed a modus operandi of registering fictitious companies in the name of unsuspecting migrant workers and the impoverished without their knowledge and showing transactions against those companies to gain unlawful input tax credit benefits. The fraudulent practice was found more in Palakkad on account of the dominant scrap trade industry in the district.

The department remains determined to go ahead with more arrests, prosecution, and hefty fine. Tax evasion in excess of ₹5 crore is treated as a cognisable and non-bailable offence, while evasion falling beneath that threshold entail refunding the evaded tax in addition to a penalty.

[The Hindu]