4 arrested, 2 syndicates busted in fake GST invoices case in Mumbai

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In yet another series of raids in Mumbai this time, the Directorate General of GST Intelligence (DGGI-MZU), under CBIC has arrested 4 persons representing 4 companies on Tuesday on charges of cheating the Govt to the extent of Rs 408.67 Crore besides indicting 5 other companies in one case and one more company in another case by raising fake invoices.

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The arrested persons, in the first case, include the Directors of Rane Megastructure, Keshariya Metal Pvt. Ltd. and its group companies and Managing Director of Shailaja Commercial Trade Frenzy Ltd. besides Proprietor of ACS Hardware and Networking for availing and utilising the fictitious Input Tax Credit (ITC) amounting to a total of Rs. 408.67 Crore on the strength of invoices received and issued without any supply of goods or services.

On the basis of the investigation conducted, it is seen that ACS Hardware and Networking had fraudulently claimed ITC of approximately Rs. 85.38 Crore without any supply of goods or services and further the same amount of Rs. 85.38 Crore was passed on to Rane Megastructures on the strength of invoices having a taxable value of Rs.474 Crore without any supply. Rane Megastructures further passed on ITC of approximately Rs. 85.44 Crore to another company, without any actual supply. In this cartel, bogus ITC has been passed on in a linear manner, in which ultimate beneficiary has availed and utilised ITC either for payment of their output tax liability or taking a refund of unutilised ITC. Some persons of this cartel have been arrested earlier.

In another case, a group of companies comprising Keshariya Metal Pvt. Ltd., Kajal Trading Co., Hi-Tech Impex, Gravity Alloys and Sunshine Impex was found to be involved in creating fictitious invoices with an aim to avail and pass on of ineligible ITC on the strength of only invoices, without any supply of goods or services. In this manner, they have availed and passed on Input Tax Credit cumulatively amounting to Rs. 103.78 Crore in a fraudulent manner, without any supply of goods or services.

In a separate case, Shailaja Commercial Trade Frenzy Ltd. was also involved in issue and receipt of bogus invoices resulting into fraudulent availment of ITC amounting to Rs.48.69 Crore on the strength of invoices, without any supplies. The bogus supply was used to inflate the turnover.

As per Section 132 of the CGST Act, 2017, issuance of an invoice or bill without the supply of goods or services and wrongfully availing or utilisation of Input Tax Credit on a bill/invoice, without any supply of goods or services is a cognizable and non-bailable offence.

All the above accused four persons have been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) and Section 132 (1) (c) of the said Act and were produced before the Hon’ble Court, all the four accused have been remanded to judicial custody till 24/11/2020. Further investigation is in progress.

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