At least 104 arrested in 3 weeks in fake GST invoice fraud: DGGI

The Directorate General of GST Intelligence (DGGI) and the CGST Commissionerates, in the three weeks of the nationwide drive against GST fake invoice frauds, have so far arrested 104 persons for illegally availing or passing on input tax credit (ITC) fraudulently through fake entities and fly-by-night firms and circular trading.

On Friday, the authorities arrested 8 more fraudsters, booked 65 cases and unearthed 114 fake GSTIN entities. In the current drive so far, 1,161 cases have been filed against 3,479 fake GSTIN entities.

DGGI sources said that during the drive, searches and surveys were conducted in more than 38 cities/metros including in Meerut, Bhopal, Jaipur, Bangalore, Delhi, Hyderabad, Bhubaneshwar, Siliguri, Ahmedabad, Lucknow, Kolkata, Kanpur, Nagpur, Chennai, Mumbai, Visakhapatnam, Gurugram, Pune, Ranchi, Belagavi, Patna, Guwahati, Raipur, Jammu, Jodhpur, Indore and Thane.

Further investigations in these cases are in progress to unravel the network and multiple chains of fake invoices' benefactors and also to ascertain the exact amount of tax evasion and usurpation by these fake entities and fraudsters, sources said.

Meanwhile, source part of the investigation said that attempts were made by a few masterminds of the fake invoice scam to obtain bail but the courts have denied it. In Mumbai, the sessions court rejected the bail application of Sunil Ratnakar Gutte, son of a sitting MLA and Managing Director of Sunil Hi-tech, who was arrested on the basis of multiple documentary evidences along with his business associate Vijendra Ranka, in a fake invoice scam worth of Rs 520 crore of ITC. The ACMM court at Esplanade, Mumbai, has extended his remand up to December 8.

Sources said that Gutte first filed a bail application at the ACCM court and later withdrew it without pleading despite filing of reply by the DGGI, Mumbai Zone, and later went to the sessions court to seek bail which also rejected the application after hearing the matter for almost seven days.

It may be recalled that Sunil Hi-tech Engineers Ltd had been engaged in availing and utilising ITC based on bogus invoices, issued without any supply/receipt of goods/services. It was revealed that Sunil Hi-tech had availed fraudulent ITC to the tune of Rs 304 crore from multiple entities and had passed on fraudulent ITC to the tune of Rs 216 crore to multiple entities, based on bogus invoices issued without any receipt/supply of goods/services.

Sunil Hi-tech is registered pan India and is under investigation by other zonal units of DGGI also for availing and passing on ITC fraudulently. The main objective appears to be to artificially inflate the turnover and obtain enhanced credit limit from the bank and/or loans, DGGI sources said.