The Ahmedabad — South Commissionerate of Central GST (CGST) has busted a racket of issuance of fake invoices, which involved fraudulently utilising ineligible input tax credit (ITC) and evading GST. The scam's alleged kingpin has been arrested for issuing bogus invoices worth Rs175 crore to pass on fraudulent ITC amounting to Rs 32 crore.
The Ahmedabad — South Commissionerate of Central GST (CGST) has busted a racket of issuance of fake invoices, which involved fraudulently utilising ineligible input tax credit (ITC) and evading GST. The scam's alleged kingpin has been arrested for issuing bogus invoices worth Rs175 crore to pass on fraudulent ITC amounting to Rs 32 crore.
This is the first such arrest by the CGST in Ahmedabad, and only the second in Gujarat, said officials.
A release issued by the CGST commissionerate said that the alleged kingpin Samirhusain Mithawala, 38, had opened more than 20 firms using personal details and documents of various individuals. He used to pay a lump sum amount to these individuals every month for using their documents and running firms in their names.
"Based on intelligence and information gathered, searches were conducted at various locations by officers of Preventive wing. Incriminating documents recovered and evidence gathered revealed a syndicate operating several namesake firms for the issuance of invoices without any physical movement of goods," the release said.
The firms were allegedly used to issue invoices without a supply of any goods or services, and they claimed input tax without any actual purchases. It also came to light that the accused facilitated fraudulent claiming of ITC by issuing invoices for outward supplies to enable various purchasers, who were duly registered with GST, to claim ITC without receipt of goods.
Mithawala was arrested on Thursday and produced before the additional chief metropolitan court, which sent him to judicial custody till January 16. "Involvement of other individuals operating similar fraudulent firms cannot be ruled out, and is under further investigation," the commissionerate said.
HOW THE SCAM WAS PERPETRATED
- The accused opened more than 20 firms using personal details and documents of different individuals
- Used to pay a lump sum amount to them every month for using their documents and running firms in their names
- Took office space on rent for GST registration and opened bank accounts in the names of various colluding individuals
- A bank account was opened, rent agreement completed, and subsequently GST registration was obtained
- GSTIN numbers were used to generate invoices and pass on GST credit without any actual movement of goods or any financial transactions
- All regulatory filings were done by Mithawala, according to CGST
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