The Gujarat zone of CGST Thursday busted a fake GST invoice racket and arrested a man who admitted to operating 24 shell firms. This is the second arrest since GST was implemented under the CGST Act in 2017. The man, Samirhussain Mithawala, has been remanded to judicial custody by the Additional Chief Metropolitan Magistrate of Ahmedabad until January 16.
Mithawala, who is believed to be the kingpin of a syndicate running this racket, had issued bogus invoices worth approximately Rs 175 crores to pass on fraudulent input tax credits (ITC) amounting to Rs 32 crores. A senior official in the CGST Department said, “The figures are likely to go up as we continue to investigate.”
The racket was busted by the preventive wing of CGST Ahmedabad-South Commissionerate, wherein Mithawala had availed and utilised ineligible input tax credit (ITC) to evade payment of GST.
The CGST Ahmedabad-South Commissionerate had in September red-flagged Harihans Enterprises of Ahmedabad for registering fake invoices despite no movement of goods or financial transactions.
Upon investigation, the proprietor of Harihans Enterprises, Raju Chavda, led the department to Mithawala, who was found to be paying a lump-sum amount of Rs 10,000 per month to such individuals in return for using their documents and running firms in their names.
After Mithawala was arrested, he admitted to having opened 24 such shell firms using the personal details and documents of various individuals. The proprietors of these shell firms will be held accountable, according to the CGST Department.
The first arrest under this act in Gujarat was by the Vadodara zone a few months back.
Source : https://indianexpress.com/article/india/gst-fraud-arrest-gujarat-cgst-ahmedabad-5523244/