The Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI) has recently brought to light a significant case of tax evasion, amounting to a substantial Rs 20 crore, involving fraudulent practices within the chewing tobacco industry and the officers and arrested one for the crime.
This revelation sheds light on a complex scheme where the company JD International, based in Ahmedabad, was found to be engaging in illicit activities related to availing input tax credit and making fraudulent claims for Integrated Goods and Services Tax (IGST) refunds, all of which were carried out without the actual exchange of physical goods. In response to these revelations, Harsh Patel, a manager at JD International, was taken into custody as part of the investigation, reported TOI.
The details of this case suggest that JD International, owned by Dipesh Jain and overseen by Harsh Patel, allegedly procured chewing tobacco under the Baghban brand. An examination of dispatch records revealed that the consignments of this tobacco were sent to two manufacturing companies for processing on a job-work basis.
What became apparent during the investigation was the deceptive and irregular nature of JD International’s purchase of Baghban brand tobacco. Essentially, the company had been issuing invoices without actually carrying out the supply of the goods, constituting a clear instance of fraudulent practices.
To uncover the extent of these activities and gather more evidence, the DGGI Ahmedabad unit conducted search operations at 15 different premises. These operations led to the discovery of various documents and evidence further implicating JD International in these fraudulent practices.
The investigation also revealed that JD International had unlawfully obtained input tax credits amounting to a substantial Rs 20 crore. These credits were falsely claimed as IGST refunds, all under the pretext of exporting branded tobacco.
In support of these findings, statements from company employees, suppliers, agents, and workers were obtained, all confirming the veracity of the claims against JD International. Consequently, Harsh Patel was taken into custody on October 13 and presented before a court, where he was remanded to judicial custody for a period of 14 days.
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