Acting on Intelligence received from Chief Commissioner’s Office, CGST Vadodara, Central GST & Central Excise, Surat Commissionerate has unearthed a case of a fraudulent claim of IGST refunds on exports made by Surat-based 03 firms, namely M/s Bluemoon Textiles, M/s Classic Industries and M/s F.S. Textiles. Preliminary investigation reveals that these firms received only invoices from other non-existing firms/fake firms without receipt of goods, and thereby, availed fraudulent Input Tax Credit (ITC).
During searches at various premises of suppliers of invoices, it was observed that these firms were registered with the GST Department by misusing the identity/documents of daily wagers, casual workers etc. Some of these non-existing/fake firms are M/s Star Trading; M/s Laxmi Enterprises, M/s Sabar Traders, M/s Adhoc Trading, M/s Kabir Enterprises etc. Out of these firms, M/s Star Trading has been found to have issued invoices showing the value of goods as Rs. 133 crores involving GST of Rs. 10.5 crores.
The above-said 03 firms utilized fraudulently availed ITC amounting to approximately 20 Crores for payment of IGST on goods exported and then claimed refund of the same. Sh. Gulam Salim Godil, Prop. of M/s Bluemoon Textiles and partner of M/s Classic Industries (Partnership firm) and handling business of M/s F.S Textiles, in his statement, has admitted to have received invoices from various firms without receipt of goods and have availed fraudulent ITC to claim refund of IGST. He has further admitted that they used to purchase cheaper quality textile items from the market for export and used the said high-value invoices for claiming IGST refunds. He has also admitted that he is controlling M/s Star Trading and M/s Kabir Enterprises which issued invoices to above-said 03 firms.
In this case, 20 fake firms which have issued invoices of goods of estimated value to the tune of around Rs. 600 crores and involving fake ITC of Rs. 40 crores are under scanner.
The evidence gathered during investigation make it evident that Sh. Gulam Salim Godil has committed the offence as provided under Section 132)1)(b) & (c) of the CGST Act, 2017, which is punishable with imprisonment for a term which may extend to S years and with fine. Such offences are cognizable and non-bailable and therefore, he has been arrested today evening under section 69 of the COST Act, 2017. He is being produced before the magistrate for remand.
The further investigation against above-said 03 exporting firms and other fake firms is in progress.
