GST authorities arrest 2 for fraudulently availing Rs 127 cr refund

Haryana GST authorities have arrested two persons for generating fake invoices and fraudulently availing input tax credit totalling Rs 127 crore.

The arrests were made by the Directorate General of GST Intelligence (DGGI), Gurugram Zonal Unit (GZU), Haryana.

Gulshan Dhingra and Sanjay Dhingra, both residents of Delhi, were arrested on October 7 under various sections of the Central Goods and Services Tax Act (CGST), 2017 for "causing loss to exchequer by evasion of GST", the finance ministry said in a statement on Wednesday.

The accused were sent to judicial custody till October 19 by a Gurugram court, it added.

The two individuals were found "involved in fake invoices racket having taxable value of Rs 931 crore and fraudulently passing/ availing Input Tax Credit (ITC) amounting to Rs 127 crore through a complex web chain of various entities".

According to the ministry, many entities were under the control of the two persons and they also formed separate entities in the name of their employees/ dummy persons and generated fake invoices without actual movement of goods.

The duo availed fraudulent ITC to offset their GST liability and also passed on such fraudulent ITC to further buyers who availed the same to discharge their GST liability against their outward supplies, it added.

The ministry noted that these activities were done with an ulterior motive to defraud the government exchequer.

During the course of investigation, their employees/ dummy persons admitted of having no knowledge of movement of the goods concerned.