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GST officers bust fake billing racket, arrest 1 person

The syndicate was being operated by floating seven different fake firms with the intent of passing of inadmissible credit to the tune of Rs 137 crore

twitter-logoPTI | October 29, 2020 | Updated 23:24 IST
GST officers bust fake billing racket, arrest 1 person
The GST officers conducted searches in more than nine places

GST officers have busted a racket which generated fake bills worth about Rs 1,278 crore for fraudulently claiming ITC, and arrested one person, the Finance Ministry said on Thursday.

Based upon specific intelligence, the officers of the anti-evasion branch of Central Goods and Service Tax (CGST), Commissionerate, Delhi (East) busted a major racket for generation of huge inadmissible input tax credit (ITC) through fake billing of Rs 1,278 crore (approximately), the ministry said in a statement.

The syndicate was being operated by floating seven different fake firms with the intent of passing of inadmissible credit to the tune of Rs 137 crore.

The GST officers conducted searches in more than nine places, spread over different locations in the state of Delhi and Haryana, to identify the taxpayers who were defrauding the exchequer.

The modus operandi of fraudulent taxpayers included creation of bogus invoices/bills without actual movement of goods. Besides, fake e-way bills were generated to show transportation of goods.

"The mastermind of the entire racket, Ashish Aggarwal, has been arrested under Section 132 of the CGST Act on October 29 and has been remanded to transit judicial custody," the statement said.

It said the primary beneficiary firm of the bogus billing network was M/s Maya Impex, registered in the name of Aggarwal''s 66-years-old mother, through which fake ITC of Rs 77 crore has been passed on.

"The fake billing operation was primarily engaged in generating and passing of fake ITC primarily to the milk products industry. Bogus invoices were raised against fictitious sale of milk products such as ghee, milk powder, etc.

"It is pertinent to mention here that apart from the other number of distinct companies, major brands like M/s Milk Food Ltd was one of the major beneficiary of this inadmissible credit," the statement said.

So far, inadmissible ITC of more than Rs 7 crore has been recovered and further investigations are underway to expose other fictitious billing entities associated with the syndicate who have defrauded the exchequer, it added.

Separately, the Directorate General of GST Intelligence (DGGI), Gurugram arrested one person on charges of creating and operating fictitious firms on forged documents and passing fake input tax credit worth over Rs 392 crore by way of issuance of invoices without any actual receipt or supply of goods or services.

Kabir Kumar, a resident of New Delhi, following his arrest, admitted to creation of 31 firms which have generated bogus invoices without actual supply of goods amounting to Rs 2,993.86 crore and ITC amounting to Rs 392.37 crore.

"It is apparent from the investigation conducted till date, that Kabir Kumar created multiple proprietary companies merely on paper based in Gurgaon, New Delhi, Faridabad, Solan, Noida, Jhajjhar, Sirsa etc," the ministry said.

"During the investigation of his premises, it was revealed that Kabir had also attempted to flee the city, however, he was prevented from doing so at IGI Airport by the DGGI Officers with the support of Customs and CISF officials," it added.

Also read: GST officers can arrest evaders without completion of assessment: Gujarat High Court

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