GST invoices fraud: Mastermind of 115 fake firms among 59 held so far

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman and the Union Minister for Environment, Forest & Climate Change, Information & Broadcasting and Heavy Industries and Public Enterprise Prakash Javadekar brief the media on cabinet decisions, in New Delhi on Dec 04, 2019. Also seen DIPAM Ministry of Finance Secretary Tuhin Kanta Pandey and Press Information Bureau Principal Director General (M&C)K.S. Dhatwalia. (Photo: IANS/PIB)

New Delhi, Nov 25 (IANS) With the arrest of Mitesh M. Shah, who created 115 fake firms to avail and pass on fraudulent input tax credit (ITC) worth Rs 50.24 crore from Gujarat’s Vadodara, the CGST Commissionerates and the Directorate General of GST Intelligence (DGGI) have so far arrested 59 persons within ten days of the nationwide drive against the GST fake invoice fraudsters.

Shah has been termed as the mastermind in the fake invoice case by the enforcement agencies. Among those arrested by the DGGI are a woman mastermind and three Chartered Accountants. Besides, the agencies have also booked 793 cases and identified 2,802 such entities involved in the racket.

As part of the ongoing drive, the DGGI has also sent the letter to the Institute of Chartered Accountants of India to take obligatory action for professional misconduct against the three CAs who have been arrested in the GST Fake Invoice Frauds from Ludhiana and Hyderabad.

Sources said that in Wednesday’s drive, eight arrests were made, out of which four — namely Mahendrabhai Desai of Sanjay Corporation, Rakesh Kumar Chavda of Setal Enterprise, Mohd lshaq lsmail Ansari of Lohiya Enterprise and Jignesh Kumar R. Patel — were arrested by the DGGI’s Ahmedabad Zonal Unit.

The directorate said that two fraudsters, Parth Jain from Bengaluru and Ranjan Kumar Saha from Kolkata, were also arrested by its Bengaluru and Kolkata Zonal Units, respectively, and Sivanesan S. Kumaran of OMT Traders was arrested by CGST Chennai Zone.

DGGI sources said that searches and surveys were conducted by the CGST Commissionerates and the DGGI in 32 cities — Bhubaneswar, Meerut, Bhopal, Jaipur, Bengaluru, Delhi, Hyderabad, Siliguri, Ahmedabad, Lucknow, Kanpur, Nagpur, Chennai, Mumbai, Kolkata, Visakhapatnam, Coimbatore, Surat, Vadodara, Una (Himachal Pradesh), Rajkot, Kochi, Hosur, Gurugram, Pune, Ludhiana, Ranchi, Belagavi, Patna, Guwahati, Raipur and Jammu.

Sources said that during these searches and surveys, the CGST Commissionerates and the DGGI have so far recovered Rs 177.50 crore in cash and efforts are being made to apprehend some of the fraudsters who are absconding.

One of such absconder is the owner of a non-existent trading firm, namely AS International, based in Delhi having a network in Kolkata and Delhi NCR region. The firm was trading in ready-made garments and is learnt to have availed or passed on fraudulent ITC worth of Rs 18.32 crore on fake invoices. The DGGI Meerut Zonal Unit is on trail of the fraudster.

The DGGI Chandigarh Zonal Unit conducted searches at multiple places in Jammu and Delhi NCR region and detected a case of availing fraudulent ITC by Ravi Crop, Jammu, through invoices of lactose (milk products) issued by 10 fake firms based in Delhi, Haryana and UP. Further, recovery of Rs 60 lakh was also made in this case. Further investigation is on.

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