VPP’s Ardent Basaiawmoit cites a report in The Shillong Times, saying the ‘scandal’ damaged Meghalaya’s image
By Our Reporter
SHILLONG, Sep 11: The Opposition mounted pressure on the state government on Thursday, raising alarm over a Rs 500-crore GST fraud and questioning the seriousness of the authorities in tackling a string of rackets linked to Meghalaya.
Raising a zero-hour notice, VPP chief and Nongkrem legislator Ardent M. Basaiawmoit referred to an August 20 report in The Shillong Times on the alleged Rs 500-crore fraud.
He warned that if such a massive evasion of revenue went undetected, the state’s exchequer might suffer huge losses. He said the ‘scandal’ damaged the image of Meghalaya, pointing out that this was not an isolated case.
He recalled that in recent years, the state had been linked to a series of rackets, including international bike smuggling involving Bangladeshi nationals, infiltration networks, cattle smuggling, human trafficking, and coal smuggling. The GST racket, he argued, added to the long list of crimes tarnishing Meghalaya’s reputation.
Basaiawmoit demanded clarity on what steps the government was taking to identify those behind the fraud and to fix accountability on officials of the taxation department allegedly complicit in the crime.
He pressed the government to give assurances that such rackets would be dealt with firmly and punished severely to deter their recurrence.
In reply, Taxation Minister Abu Taher Mondal said the state GST Department had opened investigations into fake firms that were operating from Meghalaya and diverting Input Tax Credit (ITC) to buyers outside the state.
He maintained that the findings of these probes were being shared with other state authorities to ensure a coordinated follow-up action.
According to him, the department has also written to the Directorate General of GST Intelligence (DGGI), pressing for details of the beneficiaries of the bogus ITC so that offenders within Meghalaya’s jurisdiction can be booked.
While noting that fraud cases flagged by the DGGI are normally passed on to states and acted upon under the law, Mondal said that in this instance, the central agency did not reveal which coke plants in Meghalaya might have been involved.
He referred to The Shillong Times report on four Assam residents–Gaurav Agarwal, Deepak Agarwal, Vinod Agarwal, and Guddu Singh—who were arrested for their role in a fake billing racket, along with Shiv Kumar Mittal, the owner of GM Coke Plant at Byrnihat in Assam. Mittal was accused of evading GST worth Rs 150-200 crore through similar methods.
Explaining the backdrop, he said Meghalaya’s coke plants face an acute shortage of locally available coal since the 2014 National Green Tribunal ban on rat-hole mining. Plants, therefore, source coal through district auctions and also purchase the fossil fuel from outside the state.
These transactions are reflected on the GST portal with corresponding e-way bills showing coal movement into Meghalaya. The problem, he explained, is verifying whether such invoices are genuine, since state GST officers are not empowered to cross-check returns of firms registered in other states.
Fake invoices, he said, are typically used to generate bogus ITC, which can only be established as fraudulent if the supplier does not exist, goods are not delivered, taxes remain unpaid, or if credits are shown against fictitious payments. “Such scrutiny rests with the DGGI, which alone has the authority to inspect premises across states,” he added.
Citing GST portal records, the minister said that between 2022-23 and 2024-25, 29 of the 54 registered coke plants in Meghalaya were active, posting a combined turnover of Rs 307.06 crore. Their overall tax liability stood at Rs 18.75 crore, with Rs 15.84 crore cleared through ITC and the rest in cash.
During the same period, the plants procured 1,48,134 metric tonnes of coal from outside Meghalaya worth Rs 72.49 crore, on which an IGST of Rs 24.57 crore was paid.
Mondal concluded that the report did not clarify whether the fake billing racket was linked to the sale of coke or the purchase of coal. But, given that the shell companies were based outside Meghalaya, he said it was more likely that the fraud involved coal purchases.