The Mumbai Zonal Unit of Directorate General of GST Intelligence has busted a major input tax credit (ITC) refund fraud case. GST Intelligence has cracked down on the promoter of seven companies that have availed input tax credit worth of Rs 118 crores.
The Mumbai Zonal unit of GST Intelligence, the investigation wing of GST, has arrested Santosh Doshi, who was controlling and operating seven companies Amal Overseas Pvt Ltd, C-Kluster Expotrade Pvt Ltd, Ekon Crystalmerchants Pvt Ltd, Meticulous Overseas Pvt Ltd., Ninad Overseas Pvt Ltd, Parees Overseas Pvt Ltd and White Opal Expotrade Pvt Ltd.
A Source in GST told Moneycontrol, “These companies fraudulently availed Input Tax Credit (ITC) without any supply of goods and services on the strength of bogus invoices and claimed Rs 118 Crore as refund against exports.”
The source further said, “The modus operandi involved in this financial fraud was that several dummy units were created in Jharkhand and West Bengal on the basis of forged documents. They passed on the said bogus ITC to several shell trading firms acting as intermediary entities situated in the State of Chhattisgarh. Further, several units were created as exporting fronts at Pune and Mumbai in the State of Maharashtra to whom the units situated in Chhattisgarh supplied fictitious goods purported to be exported.”
Another source who is handling this case told Moneycontrol, “The exporting units were created merely for the purpose of availing refunds in a fraudulent manner. To nab the mastermind behind the whole channel of financial fraud, DGGI Mumbai launched an operation, by searching concerned CHAs, CAs, CSs, key persons and freight forwarders, and several statements were recorded. It was revealed that Doshi, a resident of Pune, Maharashtra, was actually the promoter and operator of these seven exporting firms. He is also the managing director of M/s Masumi Overseas Pvt. Ltd.”
The accused created a complex web using multiple layers of transactions starting from manufacturers to traders in between and ultimately to exporters to facilitate encashment of accumulated ITC.
Doshi was arrested on August 17 and has been remanded to judicial custody. He was previously arrested by Mumbai Customs in 2016.
Source: moneycontrol.com
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