The Mumbai Zonal Unit of Directorate General of GST Intelligence (DGGI) has busted an Input Tax Credit (ITC) refund fraud case and arrested the promoter of seven companies that fraudulently availed the ITC of Rs 118 crore.
The Mumbai Zonal unit of GST Intelligence, which is the investigation wing of GST, apprehended Santosh Doshi, who was controlling and operating the seven companies, namely Amal Overseas Pvt Ltd, C-Kluster Expotrade Pvt Ltd, Ekon Crystalmerchants Pvt Ltd, Meticulous Overseas Pvt Ltd., Ninad Overseas Pvt Ltd, Parees Overseas Pvt Ltd and White Opal Expotrade Pvt Ltd.
The accused set up an intricate web using various layers of transactions beginning from manufacturers to traders in between, ultimately involving the exporters to facilitate the realisation of accumulated ITC.
"The modus operandi involved in this financial fraud was that several dummy units were created in the states of Jharkhand and West Bengal on the basis of forged documents. They passed on the said bogus ITC to several shell trading firms acting as intermediary entities situated in the State of Chhattisgarh," the finance ministry said in a statement.
"Further, several units were created as exporting fronts at Pune and Mumbai in the state of Maharashtra to whom the units situated in the State of Chhattisgarh supplied fictitious goods purported to be exported. The exporting units were created merely for the purpose of availing refund in a fraudulent manner," it added.
The ministry further stated that in order to nab the mastermind behind the whole channel of financial fraud, DGGI, Mumbai launched an operation, "by searching concerned CHAs, CAs, CSs, key persons and freight forwarders and several statements were recorded."
It was revealed during operation that Doshi, who is also the MD of Masumi Overseas Pvt. Ltd. was the promoter and operator of the seven exporting firms.
Doshi was arrested on August 17 and has been remanded to judicial custody. He was also arrested by Mumbai Customs in 2016, the ministry said, adding that further probe in the matter is in progress.
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