1 Racketeer arrested in Rs 41 Cr fake GST invoice scam in Mumbai, web of fraud companies found

New Delhi: The Directorate General of Goods and Services Tax Intelligence, Mumbai Zonal Unit (DGGI-MZU), arrested one person, Tejas Desai, on Saturday, 14 December, for fraudulently availing input tax credit of Rs. 41.15 crores without any supply of goods and services and only on the strength of bogus invoices. The arrested person had claimed Rs. 38.55 crores as IGST refund against exports.

In a Press note issued by Seema Jere Bisht, Principal Additional Director General, DGGI-MZU, it has been stated that in the all India DGGI operation conducted on 11 September, three exporters were allotted to DGGI Mumbai for investigation.

DGGI Mumbai searched their premises on 11 Sep and found that they were bogus entities and created merely for the purpose of availing refunds in a fraudulent manner. To unearth modus operandi and nab the mastermind, DGGI Mumbai launched an operation: by following the money trail of the IGST refund obtained, several searches were conducted all over India on the premises of CHA, many companies, key persons, forex dealer, commission agents and freight forwarders, and several statements were recorded.

It was revealed that Desai, a resident of Surat, who is also director, promoter and operator of 15 companies, connived with several persons for availment and utilization of Input Tax Credit of Rs. 41.15 crores and further availment of IGST refund of Rs. 38.55 crores on the strength of bogus and fake invoices.

Desai was arrested on Saturday and produced before the Additional Chief Metropolitan Magistrate Court in Mumbai, who remanded him to 14 days judicial custody. It was also gathered that he is a habitual offender and had been arrested by the Central Excise Department, Surat, in 2005 for export rebate fraud and by DRI, Mumbai, in 2007 for over valuation of exports.

The accused person created a complex web using multiple layers of transactions, through custom house agents, freight forwarders, forex dealers, individuals, and commission agents, and made exports using different IECs and different bank accounts.

It was a major racket that involved persons who helped in the creation of dummy exporters, entities involved in the movement of refund proceeds in multiple layers, forex dealers and companies and persons who finally encashed it in cash form and returned it to the mastermind.

Tejas Desai was actively controlling these transactions at all levels, said the Ministry of Finance, adding that further investigation is under progress.


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The ID Staff

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