Two South Bombay businessmen held for Rs 250 crore tax fraud


MUMBAI: Two businessmen from South Mumbai were arrested after they allegedly submitted fake sale and purchase invoices and claimed Input Tax Credit (ITC) of Rs 250 crore. ITC is paid by businessmen during a purchase and it can be used to reduce tax liability when a sale is made.

Anti-evasion wing of the Central Goods and Service Tax and Central Excise (CGST) department arrested Dharmesh Girish Kumar (42) and Yashpal Piccholiya (39) who connived to cheat the exchequer.

Routine investigation revealed malpractice by some companies.

On January 22, officials raided Yash Alloys at Virmani Market in Masjid Bunder, Dixit Enterprises and Brijeshwari Enterprises at Gulalwadi in Girgaum where they found several incriminating documents, including fake sale and purchase invoices.

During questioning, Dharmesh Dixit stated he had started a firm called MD Impex in 2018 in his driver Manish Dhumal’s name. Using this firm, he issued invoices without sale or purchase of goods for commission of Rs 2 lakh per month.

Officials said Dixit also used to get tax invoices from various parties without receipt of any goods. He used to get purchase bills at the rate of 1%. In turn, he issued sale invoices for 1.5% commission.

Officials said the accused appear to have indulged in huge cash transactions by creating fake documents and setting up an intricate web of companies to fraudulently claim over Rs 250 crore.

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