The Anti Evasion wing of CGST Thane Commissionerate, Mumbai arrested three persons including two traders and a Chartered Accountant on 05.09.2018 for issuing bogus invoices worth hundreds of crores to avail fraudulent input tax credit (ITC) amounting to Rs. 60 Crore (Approx), a press release issued by the department said.
The Kingpin Shri Babulal Chaudhary alias Rahul Chaudhary, aged 39 years had opened a firm M/s Romex Trading Co., using the identity documents of Shri Dharmendra Pandey, the second accused. He got the firm registered under GST by using all the documents of Shri Dharmendra Pandey who was duly remunerated for his role. All regulatory filings were done by Shri Rajesh Kumar B. Sharma, Charted Accountant who knew all details of the business of Shri Babulal Chaudhary. Shri Rajesh Kumar B. Sharma, CA was also the sourcing business for Shri Babulal Chaudhary for a consideration.
On 04.09.2018 based on intelligence, the place of residence and business of Shri Babulal Chaudhary alias Rahul Chaudhary, Shri Dharmendra Pandey, and Shri Rajesh Kumar B. Sharma was searched by officers of CGST Thane Commissionerate and several incriminating documents were recovered. Detailed analysis of the documents recovered and statements recorded of all the three accused persons revealed that besides M/s Romex Trading Co., six more additional namesake firms were registered in a similar manner and the names of all the firms were used to issue invoices without receiving any goods or services and they have claimed input tax without any purchases. It also came to light that the accused had issued invoices for outward supplies to enable various purchasers who were duly registered in GST to claim input tax credit without the supply of goods or services whatsoever and thus facilitated to claim input tax credit (ITC) fraudulently. Further, it was found that the accused persons were guilty of an offense committed under CGST Act,2017 for the reason that he has issued tax invoices without the supply of goods or services leading to wrong availment or utilization of input tax credit by the purchasers. As per returns uploaded by accused filed for the periods from July’17 to March 18, the total value involved in the said invoices is amounting to hundreds of crores and corresponding tax involved amounting to Rs 60 crore (approx.).
The accused persons were asked to produce the documents in support of the Input tax credit claimed in their return, but they failed to produce the valid purchase invoices. Hence, it was evident that they have not received any goods or services and without purchases, they have claimed input tax credit.
Based on the above investigations all these three accused were arrested and produced before the Addl. Chief Metropolitan Magistrate, Mumbai who ordered for judicial custody of all three accused until 19.09.2018.
Further investigations are in progress.
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