Tax department finds auditor who ran tax racket

The Commercial Taxes Department of Karnataka raided the premises of a GST tax auditor in Bengaluru and Davanagere, and busted a fake input tax racket operated by him, according to a press note by C Shikha, the commissioner of commercial taxes, Bengaluru.

The auditor caused a loss to the government exchequer by not depositing the tax collected from GST registered taxpayers. Instead, he adjusted the fraudulently claimed input tax credit towards the tax liabilities without the knowledge of the taxpayers.

The auditor’s actions were revealed when tax officials investigated tax payers with excess input tax credit claims.

"It is found that the auditor has duped 12 other tax payers in a similar manner resulting in excess claim to the extent of Rs 10 crore," the commissioner said, adding that the department has succeeded in recovering Rs 5.31 crore from the business entities concerned.

The tax department has advised taxpayers to exercise due care and diligence while paying liabilities through third parties.