Directorate General of GST Intelligence detects fake invoices worth over 700 cr

The total detected amount in major fake invoice cases is ₹798.88 crore.

Fake invoices worth close to ₹800 crores were detected by the Directorate General of GST Intelligence (DGGI) (Jaipur) zonal unit in past 40 months, said officials of the investigating wing of Goods and Services Tax (GST) intelligence wing.

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According to official data of the department, between July 1, 2017, and January 23, 2021, the DGGI arrested 25 people of which 21 have been arrested for issuing fake invoices.

“The total detected amount in major fake invoice cases is ₹798.88 crore, of which ₹204.86 crore has been recovered by this zonal unit,” said a DGGI official.

On Saturday also, five people, including a chartered accountant (CA) were arrested on charges of a case of preparing fake bills of more than ₹1,000 crores by the zonal directorate of GST intelligence.

Acting on tip-off, an investigation was initiated against Vishnu Garg, aged 45 years, resident of Vaishali Nagar, Jaipur Proprietor of M/s. Vikas Trading Company, M/s. Shri Shyam Traders, M/s. Vinayak Associates, M/s. SP Enterprises, M/s. VK industries & Corporation.

"Intelligence suggested that he was indulged in the creation of fake firms and issuing fake invoices without any actual supply of goods and thereby resulting in availing of fraudulent ITC (Input Tax Credit) on such invoices. He had created and operated 20 other such firms which also issued fake invoices. On the basis of preliminary inquiry, it came to light that he was actively indulged in breaching of various provisions of the CGST, Act, 2017, RGST, Act, 2017 and IGST Act," said an official.

He added that searches were conducted on January 21 at the residence and office premises of Vishnu Garg and various incriminating documents were resumed.

"The total value involved in the fake invoices issued by these 25 firms is ₹1004.34 crore, involving total ITC of ₹146.08 crore. This amount is detected on the preliminary investigation and may increase later. Garg was the mastermind behind this bogus billing and had issued invoices to around 200 firms located in Rajasthan, MP, Telangana etc. He issued bills/invoices mainly relating to timber, scrap, plywood, gold etc. Investigation has also revealed that he created the said firms for the sole purpose of fraudulently passing of the ITC on the basis of fake invoices without actual supply of Goods. A total amount of Rs. 4.05 crore has been deposited till date," the official added.

Badri Lal Mali, 27, and Mahendra Saini, 23, both Resident of Tonk district, actively participated in the operation of this fake invoice racket and helped Vishnu Garg in running these firms. "Further, chartered accountant Bhagwan Sahay Gupta, 41, (resident of Jaipur) was also actively involved in providing assistance and guidance to run 21 fake firms out of 25 fake firms. All four of them (Vishnu Garg, Badri Lal Mali, Mahendra Saini and CA Bhagwan Sahay Gupta) were operating and handling this fraud together. On the basis of preliminary inquiry, it came to light that they were also indulged in breaching of various provisions of the CGST Act, 2017 and rules made thereunder," said the official.

Further, Pradeep Dayani, 31, resident of LB Nagar, Hyderabad, Telangana actively assisted in running of a firm in Hyderabad in connivance with Garg. He issued invoices, transferred remittances on commission basis and filed returns. He also had one more firm registered in his name for the same purpose of issuing invoices without supply of goods. Supply of ₹17.35 crore was made from these two firms and ITC of ₹3.15 crore was passed on fraudulently.

Vishnu Garg, Badri Lal Mali, Mahendra Saini and CA Bhagwan Sahay Gupta have been arrested under Section 69 of the CGST Act, 2017. Pradeep Dayani has been arrested under Section 69 of CGST Act, 2017 for committing non-cognizable and bailable offence.