The Mumbai zonal unit of the Directorate General of Goods and Services Tax Intelligence (DGGI) on Thursday arrested Sunil Gutte, son of sugar baron Ratnakar Gutte in connection with a fake Input Tax Credit (ITC) fraud amounting to Rs 520 crore.
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. Sunil, who is the director of Sunil Hitech Engineering Ltd, was arrested on charges of having fraudulently availed and utilised, as well as passed on fictitious ITC, total amounting to Rs 520 crore, on the strength of bogus invoices received and issued without any actual supply of goods or services.
Ratnakar Gutte did not respond to the calls and messages from this newspaper for his version on the matter.
“Sunil Hitech Engineers Ltd had issued and received fake invoices valued at approximately Rs 3,000 crore, and involving ITC amounting to Rs 520 crore. Investigations conducted by the DGGI across the country have revealed that the beneficiaries of these bogus invoices are located in all parts of the country, including New Delhi, Hyderabad, Ludhiana, Gurugram, Meerut, Ahmedabad, Kolkata, etc. The investigations have revealed that M/s. Sunil Hitech Engineers Ltd. is one of the key operators involved in the fake ITC cartels throughout India,” said an official.
The unit also arrested Vijendra Vijayraj Ranka, director of Shree Oshiya Ferro Alloy Pvt Ltd. It was also revealed that Shree Oshiya Ferro Alloy Pvt Ltd had made substantial supplies to Sunil Hitech Engineers Ltd.
“Enquiries revealed that M/s. Shree Oshiya Ferro Alloy Pvt Ltd had fraudulently issued as well as received bogus invoices without actual supply or receipt of any goods or service to the tune of Rs 1,371 crore, involving ITC amounting to Rs 209 crore,” said the official. “These bogus transactions were used not just for generating bogus input tax credit, but also for artificially inflating their turnover so as to gain higher credit limit and bank loans, and also to siphon off funds,” the official said.
As per section 132 of the Central Goods and Services Act, 2017, issuance of an invoice or bill without supply of goods or services and wrongful availment or utilisation of ITC on a bill or invoice, without any supply of goods or services is a cognizable and non-bailable offence. The duos were arrested under the provisions of section 69 (1) of the CGST act, 2017 for committing offences under section 132 (1) (b) and section 132 (1) (c) of the said act. Both the accused have been remanded to judicial custody.
This is not the first time that the Gutte family has faced allegations of alleged misappropriation. Sunil’s brother film director Vijay R Gutte, was arrested in 2018 in a case of alleged Rs 34-crore GST fraud allegedly committed through fake documents. Vijay is director film ‘The Accidental Prime Minister’ starring veteran actor Anupam Kher and is based on Dr Mahnmohan Singh.
Ratnakar Gutte, also leader of BJP ally Rashtriya Samaj Paksha (RSP), was probed by the Enforcement Directorate (ED) over alleged misappropriations of funds. As per allegations, Gangakhed Sugar and Energy Private Limited (GSEPL), whose chairman Ratnakar Gutte and others, used names of farmers from the village in Parbhani district, some of whom were dead, to apply for loans worth Rs 328 crore from six banks including five public sector banks and one private bank.