SHILLONG, SEP 11: Minister in-charge Taxation Abu Taher Mondal on Thursday said the State GST department is actively investigating fake firms operating within Meghalaya.
“I can assure the House that the State GST department is actively investigating fake firms operating within Meghalaya which are engaged in passing on Input Tax Credit (ITC) to recipients located outside the state and the findings of such investigations is shared with the respective state authorities so that coordinated action can be taken against the fraudulent entities involved and proper action can be taken against them accordingly,” Mondal said while replying to a Zero Hour notice moved by VPP legislator from Nongkrem Ardent M Basaiawmoit relating to reports alleging Rs 500-crore GST fraud involving Meghalaya coke plants in the Assembly.
He informed that the State GST Department has formally written to the Directorate General of GST Intelligence (DGGI) requesting that such information be shared so that necessary action can be initiated against the recipients of bogus Input Tax Credit (ITC) under the state jurisdiction.
“Fraud cases detected by agencies such as the Directorate General of GST Intelligence (DGGI) are regularly communicated to state authorities, and wherever such cases have been shared, appropriate action has been taken in accordance with law,” he added.
The report had alleged that on August 20, 2025, four individuals were arrested for their involvement in a fake billing scam. The accused are Gaurav Agarwal, Deepak Agarwal, Vinod Agarwal, and Guddu Singh all residents of Assam. Another person Shiv Kumar Mittal-owner of GM Coke Plant in Byrnihat under Assam’s jurisdiction was arrested for allegedly evading GST amounting to approximately Rs.150-200 crore through similar schemes.
Mondal however said the Directorate General of GST Intelligence (DGGI) has not yet disclosed details to the Meghalaya State GST Department regarding which specific coke plants in Meghalaya wae benefited from these fraudulent schemes.
He noted that legally sourced coal within Meghalaya has been limited ever since the National Green Tribunal (NGT) banned rat-hole mining in 2014. As a result, coke plants rely mainly on coal obtained through district administration auctions, and to meet their full requirements, they also procure coal from outside the state.
Input Tax Credit (ITC) is a key feature of the GST framework, as it allows recipients to reduce their output tax liability. A recipient can claim ITC only when invoices are reported in GST returns.
On the GST portal, all inter-state coal purchase invoices of coke plants in Meghalaya are duly reflected, with corresponding e-way bills generated to record the movement of coal into the state.
“The challenge, however, lies in verifying the genuineness of such invoices. State GST officers cannot cross-check the returns of taxpayers registered in other states. Fake invoices are typically issued to pass on bogus ITC, and they can only be established as fraudulent if the supplier is non-existent, if goods or services are not actually supplied, if taxes are not paid as declared, or if payment is-made using bogus ITC,” Mondal said adding “Investigations of out-of-state suppliers fall under the jurisdiction of the Central GST authorities, specifically the Directorate General of GST Intelligence (DGGI), which has the power to inspect business premises across different states.”
He further informed that according to GST portal records, between 2022-23 and 2024-25, 29 coke plants have been operational out of the 54 registered. Their cumulative turnover during this period stands at Rs.307.06 crore, with a total tax liability of Rs. 18.75 crore. Of this, Rs. 15.84 crore was discharged through ITC and the balance in cash. During the same period, these plants purchased 1,48,134 MT of coal from outside the state, valued at Rs. 72.49 crore, with IGST of Rs. 24.57 crore.
Referring to the allegation, the minister stated that the report does not specify whether the fake invoice billing relates to the sale of coke by the plants or to the purchase of coal as raw material. However, since the shell companies involved are located outside Meghalaya, it is likely that the fraud pertains to coal purchases by coke plants in that state, he stated.
