GST Officials Unearthed Massive Tax Frauds Amounting to Rs 2,350 Crore

The Goods and Services Tax (GST) Intelligence department has unearthed a fraud related to the utilisation and passing on of ineligible Input Tax Credit (ITC) using fake invoices. The Ministry of Finance released a statement that the officials have arrested three persons involved in fraud amounting to more than Rs.2,350 crore. 

The officials found that Sachin Bhoruka, Director and Partner in several firms such as Pioneer Trading, Erman Metals, Marshal Multiventures, etc., was arrested for availing ITC of around Rs.485 crore and passing on fictitious ITC of Rs.485 crore approximately. Thus, the total amount of the fraud committed involved GST close to Rs.970 crore.

In another investigation, officials found that Mahesh Kinger, authorised signatory of Blue Sea Commodities and Director of Theme Lights, was also engaged in the fraudulent utilisation of ITC. He is also involved in passing on ineligible ITC based on fake invoices issued and received without actual supply of goods or services.

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These entities availed ineligible ITC of approximately Rs.580 crore and had passed on ineligible ITC to a tune of Rs 579 crore. The total amount of the fraud committed involved a GST of nearly Rs.1,159 crore.

Further, the GST officers arrested Deepak Kumar Prajapati, Director of Udyog Kiran Ltd due to a similar fraud. The subsequent investigations revealed that the director had set up a complex web of over 22 firms and indulged in circular trading to artificially inflate their turnover to avail higher bank loans and credit facilities.

Based on the investigation conducted, it has been noticed that the director had passed on fake ITC of nearly Rs.126 crore, and have availed ITC amounting to Rs.94 crore and the total fraud amount to Rs.220 crore.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in