Mumbai: ₹2,350-crore GST frauds unearthed, three arrested

All three were arrested on Wednesday and have been sent to judicial custody by a city court. A senior DGGSTI official confirmed that the accused were involved in wrongfully availing and utilising, as well as passing on, input tax credit based on bogus invoices.

The Directorate General of Goods and Services Tax Intelligence (DGGSTI) in three separate operations unearthed fake input tax credit (ITC) frauds amounting to around ₹2,350 crore and arrested three businessmen.

GST Bhavan at Churchgate. (HT FILE)

ITC is an option that allows taxpayers to claim credit for taxes paid on purchases. Issuance of an invoice without supply of goods or services and wrongfully availing or utilising ITC on a bill/invoice without any supply of goods or services are cognizable and non-bailable offences.

A senior DGGSTI official confirmed that the accused were involved in wrongfully availing and utilising, as well as passing on, ITC based on bogus invoices. All three were arrested on Wednesday and have been sent to judicial custody by a city court.

In the first operation, GST department officials arrested Sachin Bhoruka, director several firms such as Erman Metals Pvt Ltd, Pioneer Trading Co, Marshal Multiventures (I) Pvt Ltd, Aikya Infraprojects Pvt Ltd, Sanmukh Fab Industries Pvt Ltd and Flyhigh Infraprojects Pvt Ltd. He allegedly availed and utilised bogus ITC amounting to around ₹485 crore as well as having passed on fake ITC amounting to ₹485 Crore.

In a parallel investigation, Mahesh Kinger, who is authorised signatory of Blue Sea Commodities Pvt Ltd (now Curzen Infraprojects Pvt Ltd), Blue Sea Commodities and director of Theme Lights Pvt Ltd, was also found to be involved in the fraudulent practice. These firms had availed ineligible ITC amounting to ₹580 crore and had passed on ineligible ITC amounting to ₹579 Crore.

In the third operation, officials arrested Deepak Kumar Prajapati, director of Udyog Kiran Ltd. He allegedly had setup an intricate web of over 22 firms that indulged in circular trading for the purpose of artificially inflating their turnover to avail higher bank loans and credit facilities. Probe has revealed that the firms operated by Prajapati have passed on bogus ITC amounting to around ₹126 crore and availed ITC amounting to ₹94 crore, a statement released by DGGSTI stated.

Advocate Ravi Hirani, who represented accused Bhoruka and Kinger, said his clients have been made director on paper on remuneration of ₹20,000 per month. “They had no knowledge about availing ITC as it was done by others on their name. They have been used by people for their own gain. They are poor people and are cooperating with the officers by disclosing all facts known to them,” Hirani said.