By Our Correspondent
NEW DELHI/MUMBAI: In the ensuing initiative to counter the menace of fake billing operations, the officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi North, on the basis of intelligence developed through extensive data analytics, have unearthed a network of fictitious firms to generate goods-less invoices and pass-on fake Input Tax Credit to multiple beneficiaries. In all, four individuals were arrested in three different cases in terms of Section 69(1) of the CGST Act, 2017 for commission of offences under Section 132 (1) of the CGST Act, 2017. The total Input Tax Credit involved in the three cases is Rs. 178 crore. Further investigations in all the matters are in progress and the amount of fake credit and total number of companies/persons involved are likely to increase.
In the first case, four non-existent firms were created by the main perpetrators to pass-on ITC of Rs. 54 crore, primarily to 14 other firms. These firms were not only involved in issuing goods-less invoices on commission basis but also used such invoices for claiming IGST refund on export of goods. The main operators behind all these firms, Vikas Goyal and Gopal Aggarwal have confessed to their involvement in running this web of fake firms and were, arrested on 12.02.2021.
In the second case, investigations revealed that one Mohinder Kumar received fraudulent GST Input Tax Credit of Rs 111 crore in his two firms, M/s VMW Enterprises and M/s Shree Bahadur Steel Company from several bogus firms and passed on this credit to several other firms without actual supply of goods. Mohinder Kumar was placed under arrest on 13.02.2021.
In another similar case, one Surender Kumar Jain, Director of M/s VDR Colors and Chemicals Pvt Ltd. & A.V. Metals Marketing Pvt Ltd. and proprietor of M/s Surender Kumar Jain was found involved in availing ineligible ITC of Rs. 13 crore on the strength of goods-less invoices issued by non-existent firms. Shri Surender Kumar Jain was also arrested on 13.02.2021. All the accused have been remanded to 14 days of judicial custody by the Metropolitan Magistrate.
It is pertinent to mention here that since the inception of GST, Central Tax, Delhi Zone has made 25 arrests in various cases involving GST evasion amounting to more than Rs. 3,969.65 crore.
Meanwhile, the Income Tax Department carried out search and survey operations on a group based in Mumbai on 08.02.2021. This group is mainly engaged in the business of manufacturing of Gutkha, Pan masala and allied substances, besides having operations in hospitality sector. The searches were carried out across many locations in India and concluded on 13.02.2021.
The search and seizure action has led to detection of foreign assets lying with a company registered in tax-haven British Virgin Islands (BVI) with an office in Dubai and controlled and managed by the Chairman of the group. The net worth of the BVI company is Rs. 830 crore created by siphoning of funds from India. This fund has been round tripped to India in the form of share premium amounting to Rs. 638 crore in the flagship companies of the group. During the search action, various digital evidences and forensic analysis have yielded email communication, establishing control and management of the company with the promoter of the group searched. One of the employees, who was also a shareholder in the BVI company, was identified and cross examined with the promoter. It has been accepted by the parties involved that the employee was not aware about being a shareholder in the company and he had signed papers on the instruction of the main promoter.
Further, it has been found that the group has availed bogus deduction under section 80IC of the Income-tax Act, 1961 to an extent of Rs. 398 crore. The group set up 2 entities in Himachal Pradesh and the group was found to indulge in sham transactions in order to claim the aforesaid false deduction.
Apart from the above, unaccounted production of pan masala of an amount of Rs. 247 crore at 2 factory premises of the group has also been detected during the search.It has also been seen that the assessee has falsely claimed deduction u/s 10AA of the Income-tax Act, 1961 of an amount of Rs. 63 crore in the Gandhi Dham unit.
During the search action, cash of Rs. 13 lakh has been seized and jewellery amounting to Rs. 7 crore was found and has been put under prohibitory orders. Prohibitory orders have also been placed on 16 lockers and in 11 premises. Thus, the search action has led to detection of unaccounted transactions of around Rs. 1500 crore, so far.Further investigations are in progress.
