GST Dept busts Fake Invoice Racket in Ahmedabad, 1 Arrested

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The Goods and Services Tax ( GST ) department has unearthed a racket issuing fake GST invoices for fraudulently availing input tax credit under the new tax regime.

The CGST Ahmedabad-South Commissionerate officials arrested a 38-year-old city-based businessman for issuing bogus invoices worth Rs 175 crore for availing ITC worth Rs 32 crore fraudulently. He allegedly opened over 20 firms using personal details and documents of various individuals to avail benefits under GST fraudulently.

The Preventive Wings officials have confirmed that the arrest was made after incriminating documents and evidence were gathered during searches conducted at various locations based on intelligence and information gathered.

The arrested person has been sent for judicial custody till January 16, 2019, by the Additional Chief Metropolitan Magistrate, Ahmedabad.

Also Read: GST Council Meeting to be held on 10th January 2019 in New Delhi

Mishawala’s modus operandi involved payment of lump-sum amounts to individuals every month in return for using their documents and running firms in their names. After obtaining the documents from such individuals, he took office space on rent for GST registration and also opened bank accounts in the name of such individuals.

“After acquiring the KYC documents, a bank account was opened and rent agreement was completed, and subsequently, GST registration was obtained. Once the GST registration was obtained, he used the GSTIN numbers to generate invoices and pass on GST credit without any actual movement of goods or any financial transactions. All regulatory filings were done by Mithawala who knew all details of the business,” the commissioner stated.

“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 receipt of goods and thus facilitated to claim ITC fraudulently. This quantum of evasion and the gravity of the offense is cognizable and non-bailable under the CGST Act, 2017 under the provisions of Section 132,” the commissionerate further stated while adding that investigations were still on since involvement of other individuals operating similar fraudulent firms could not be ruled out.

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