GST officers arrest 2 businessmen for Rs 79.21 cr tax evasion

GST officers have arrested two businessmen for evading taxes worth Rs 79.21 crore by fraudulently issuing invoices of Input Tax Credit (ITC) without actual supply of goods, the Finance Ministry said in a statement.

Gurugram zonal unit of the Directorate General of GST Intelligence (DGGI) on September 14 arrested two businessmen -- Vikas Goel, Director of M/s Mica Industries Ltd, Delhi and Bhiwadi and M/s Satellite Cables Pvt Ltd, Bhiwadi, and Raju Singh, Proprietor of M/s Galaxy Metal Products.

The case involves fraudulent issuance of ITC invoices without actual supply of goods, involving evasion of Rs 79.21 crore on the taxable value of concocted supplies of Rs 450 crore.

"This quantum of evasion and the gravity of the offence is cognizable and non bailable under the CGST Act, 2017 under the provisions of sub section (5) of Section 132 (1). Thus, both of them were arrested under Section 69 (1) of the CGST Act, 2017 and produced before the Judicial Magistrate 1st Class (JMIC), Gurugram," the ministry said.

Searches were conducted at several places during which various incriminating documents and evidence were found.

During investigation the DGGI found that these businessmen heading Mica Industries had floated two entities namely Galaxy Metal Products, Delhi and Sri Ram Industries, Delhi for issuing such fake invoices.

"They are involved in issuing fake bills/invoices to each other in a Circular manner without any concomitant movement of goods or payments for such transactions thereby wrongful availing and utilizing fake ITC. On verification of corroborated documentary evidences and statements of various persons, it was established that there was no movement of goods against the invoices raised," the statement said.

The directors of companies and the proprietor of firms have admitted that all payments for the transactions were made by third party adjustments and there was no actual payment invoice wise.

However, the other Director of Mica Industries Vinay Gupta and Proprietor of Sri Ram Industries, Delhi, Vinod Kumar Aggarwal are absconding and efforts are being made to trace them, the ministry said.

"Further investigations are underway and the quantum of evasion is likely to go up. Officers are not ruling out the possibility of existence of several other fake firms as the investigation moves ahead," it added.