DGGI arrest director of firm in Mumbai for availing fictitious input tax credit amounting to ₹520 crores

Accused Sunil Gutte fraudulently availed and utilised ITC on the strength of bogus invoices received and issued without any actual supply of goods or services

The Mumbai zonal unit of the directorate general of GST intelligence (DGGI) on Thursday arrested Sunil Ratnakar Gutte, director of Sunil Hitech Engineering Ltd., on charges of having fraudulently availed and utilised, as well as passed on fictitious input tax credit (ITC) total amounting to ₹520 crores.

The input tax credit is an option that allows taxpayers to claim credit for taxes paid on the purchase. Issuance of an invoice or bill without supply of goods or services and wrongfully availing or utilising the input tax credit on a bill/invoice, without any supply of goods or services is a cognizable and non-bailable offence.

The accused Gutte fraudulently availed and utilised ITC on the strength of bogus invoices received and issued without any actual supply of goods or services.

A recent extensive investigation by DGGI Mumbai zonal unit led them to unearth a large cartel of companies, which had indulged and participated in the fraud. According to GST department, Sunil Hitech Engineers Ltd. had issued and received fake invoices valued at approximately ₹3,000 crores, and involving ITC amounting to ₹520 crores.

Further investigations 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. During the probe, Sunil Hitech Engineers Ltd emerged as one of the key operators involved in the fake ITC cartels throughout India. Following this Gutte was arrested on Thursday.

GST investigators believe that the bogus transactions by the accused company were used not just for generating bogus input tax credit, but also for artificially inflating their turnover so as to gain higher credit limit & bank loans, and also to siphon off funds.

Gutte was arrested under the provisions of section 69 (1) of the Central Goods and Services Act, 2017, for committing offences under section 132 (1) (b) and Section 132 (1) (c) of the said Act. He was produced in court and was remanded to judicial custody.

In a similar action, the GST officials have also arrested one Vijendra Vijayraj Ranka, director of Shree Oshiya Ferro Alloy Pvt. Ltd.

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 ₹1,371 crores, involving ITC amounting to ₹209 Crores. The investigation has revealed that Shree Oshiya Ferro Alloy Pvt. Ltd. had made substantial supplies to Sunil Hitech Engineers Ltd.