On 16 August (Friday), the Directorate General of GST Intelligence (DGGI) arrested two persons in cases related to illicit IGST refund claims. The two individuals have been identified as Mukesh Kumar and Ramesh Wadhera.
According to the statement given by DGGI, the arrest was initiated based on the input received from the Allahabad Bank (based out of Delhi). Doubtful transactions were seen in the accounts related to four proprietorship firms (Ors and Monal Enterprises). These firms had received huge IGST refunds soon after they started without any prior business transaction records.
Furthermore, the IGST refunds, which were deposited into the concerned bank accounts, were withdrawn and moved to another account quickly. Upon verification, DGGI found out that the addresses of these firms were not existing or they were not operational at the specified addresses.
Also, the investigation further disclosed that the concerned four firms did not have relevant purchases versus the exports they had claimed to have done. They did not have any corresponding export proceeds too.
The E-way bill information also disclosed that the related movement of commodities didn’t exist. Hence, the investigation team declared that the concerned four firms had involved themselves in availing IGST refunds based on fake invoices.
On further investigation, the team found out that Ramesh Wadhera was the one who operated and controlled these illegal firms. Mukesh Kumar assisted Ramesh Wadhera in deceitfully getting the required identification documents from ignorant employment seekers.
The investigation also revealed that there are ten more similar fraudulent firms which are functional under the supervision of these two individuals.
The overall IGST refund availed fraudulently by these 14 fake firms amounts to an estimate of Rs 44 crore. Between 13 and 15 August, at various premises searches were initiated. Under Section 67 of the CGST Act, Wadhera as well as Kuma, have now been arrested for actively taking part in defrauding the exchequer by raising illegal IGST refund claims.