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36 arrests so far in major drive against GST fraud

Nov. 20, 2020, 9:02 a.m.

New Delhi: On the seventh day of its nationwide drive against the GST fake invoice frauds by unscrupulous persons to usurp or pass on ineligible input tax credit (ITC), the Directorate General of GST Intelligence (DGGI) arrested 6 more persons including a woman and a Chartered Accountant. 

For the first time during the last 7 days of this drive that a woman mastermind running the fake ITC racket has been arrested from Chennai. With this, the total tally of GST fraudsters’ arrested so far in the drive has gone up to 36 which includes 3 Chartered Accountants. The DGGI has registered 519 cases against 1736 identified entities, sources within the DGGI said.

Sources said on the condition of anonymity, that today two arrests have been made in NCR, one each by Delhi and Meerut zones of DGGI and two arrests were made by Hyderabad Zonal Unit, out of which one is a professional (CA). One arrest of a lady was made from Chennai and one arrest was done from Ahmedabad. Searches and surveys were conducted in 19 cities, i.e., in Chennai, Ahmedabad, Nagpur, Visakhapatnam, Siliguri, Patna, Bhopal, Surat, Hyderabad, Nagpur, Raipur, Bhubaneshwar, Jaipur, Ghaziabad, Ludhiana, Delhi, Bengaluru, Mumbai and Kolkata.

Major arrest cases:

The DGGI Chennai Zonal Unit arrested a lady mastermind Smt. Sagila M in fake invoice frauds wherein she was running a web of 7 fake entities created and operated by herself in the names of her family members (including her recently deceased mother-in-law), relatives and friends. A case was booked against her firm M/s M.S. Traders & others for availing/ passing on fraudulent ITC of Rs. 14.87 Crore on fake invoices of MS scrap. 

During the search operation at her 8 premises in Chennai, it was also unearthed that the identity documents had been procured by her from the relatives and friends for a payment of petty monthly sum. Based on the documentary evidences gathered and the voluntary depositions of the identity lenders, she was arrested. 

The DGGI Meerut Zonal Unit arrested Sh. Daman Thakral, mastermind who had three fake firms M/s Nagpal Bros, M/s Kumar & Sons and M/s Nandi Sales in the names of his employees for passing on fraudulent ITC on fake invoices issued on various goods, such as iron sheet, M.S. ingot, M.S. channel, PVC granules, papers, electronics items (lamp & light fittings), iron & aluminum scrap, etc., and ITC was utilised by another four firms registered in the name of the mastermind and his brother.  A case was booked against these firms and their proprietors.

The DGGI, Hyderabad Zonal Unit booked a case against M/s Kineta Global Ltd. for availing fraudulent ITC on fake invoices, without receipt of any supply of works contract service, cement, steel etc. Two persons, namely, Sh. B. Venkateshwarlu, GM (Finance & Accounts) of this taxpayer and Sh. B. Srinvasa Rao his Chartered Accountant were arrested.

In the follow up investigation in an ongoing case involving 46 bogus firms which were used for passing on fraudulent ITC of about Rs. 194 crore (approx.) and where the operator and proprietors of two beneficiary firms were arrested earlier, the CGST Delhi Zone, unearthed another beneficiary of this fake invoice racket, namely Sh. Raghav Agarwal, Proprietor of M/s Dreamz International, a trader of hardware goods, had availed inadmissible ITC from these fictitious firms. A case has been booked against M/s Dreamz International.

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