The Haridwar district of Uttarakhand has sentenced a businessman to five years in prison for fraud related to input tax credits. Uttarakhand’s Goods and Services Tax department said this was the first conviction for GST evasion.

Mukesh Chandra Arya, the chief judicial magistrate, convicted businessman Surendra Singh of claiming input tax credit to the tune of 17 crore by using fake bills. Singh was arrested by the central intelligence unit, Dehradun, in April this year.

Ahmed Iqbal, Commissioner of Taxes, Uttarakhand, said Singh registered six firms in his name and that of his family members on the GST portal for manpower supply.

However, it came to light that these firms were involved in the sale and purchase of iron, plywood, and other items. For the purpose of communication, these firms had a common mobile number and e-mail. He showed fake transactions for the supply of goods to fictitious firms that don’t even exist. He availed of ITC for firms that are incorporated in Uttar Pradesh, Delhi and Haryana,” Iqbal said.

For instance, one firm, PSD Packaging, is registered in both Uttarakhand and Odisha with the same PAN number. “During our inquiry, it also came to light that 22 firms were registered in the name of one person and with the same mobile number,” he explained, adding that the firms were mostly non-functional.

The official said the conviction was a morale booster for the department and would discourage other businessmen from indulging in fraud to evade taxes.