The Directorate General of GST Intelligence continued its crackdown against fake Input Tax Credit (ITC) frauds amounting to several hundred crores. On Wednesday, the Mumbai zonal unit arrested three persons for having indulged in massive frauds involving the availment and utilization, as well as passing on of ITC on the strength of bogus invoices. The ITC is an option in the Goods and Service Tax (GST) which allows the taxpayers to claim credit for the taxes paid on the purchase.
The unit arrested Sachin Bhoruka, director in various firms such as M/s. Erman Metals Private Limited, M/s Pioneer Trading Co, M/s. Marshal Multiventures (I) Private Limited, M/s. Aikya Infraprojects Private Limited, M/s Sanmukh Fab Industries Private Limited and M/s. Flyhigh Infraprojects Private Limited. He availed and utilised fictitious ITC amounting to Rs 485.64 crore as well as having passed on fictitious ITC amounting to Rs 485.55 crore. The total quantum of the fraud committed involves GST amounting to Rs 971.19 crore.
In a parallel investigation, one Mahesh Kinger, authorised signatory of M/s Blue Sea Commodities Private Limited (now M/s Curzen Infraprojects Private Limited), M/s Blue Sea Commodities and director of M/s. Theme Lights Private Limited was also found to have engaged in the fraud. “These entities had availed ineligible ITC amounting to Rs 580.23 crore and had passed on ineligible ITC amounting to Rs 579.76 crore. The total quantum of the fraud committed involves GST amounting to Rs 1,159.99 crore,” sources said.
In a separate operation, the unit arrested Deepak Kumar Prajapati, director of M/s. Udyog Kiran Limited. “The subsequent investigations revealed that the director of M/s. Udyog Kiran Limited had set up an intricate web of over 22 firms that indulged in circular trading for the purpose of artificially inflating their turnover so as to avail higher bank loans and credit facilities. Based on the investigation conducted till date, it has been noticed that the firms have passed on bogus ITC amounting to approximately Rs 126 crore and have availed ITC amounting to Rs 94 crore. The total fraud involves GST amounting to Rs 220 crore,” he added.