Based on the investigation conducted by the officers of the DGGI – Mumbai Zonal Unit, Shri. Sachin Bhoruka, Director/Partner in various firms viz. M/s. Erman Metals Pvt. Ltd., M/s Pioneer Trading Co, M/s. Marshal Multiventures (I) Pvt. Ltd., M/s. Aikya Infraprojects Pvt. Ltd, M/s Sanmukh Fab Industries Pvt. Ltd. and M/s. Flyhigh Infraprojects Pvt. Ltd., was arrested on the charges of having availed and utilized fictitious ITC amounting to Rs. 485.64 Crore as well as having passed on fictitious Input Tax Credit ITC amounting to Rs. 485.55 Crore. The total quantum of the fraud committed involves GST amounting to Rs. 971.19 Crores.

In a parallel investigation, one Shri Mahesh Kinger, Authorised Signatory of M/s Blue Sea Commodities Pvt. Ltd. (now M/s Curzen Infraprojects Pvt. Ltd.), M/s Blue Sea Commodities and Director of M/s. Theme Lights Pvt. Ltd. was also found to have engaged in the fraudulent availment & utilization, as well as passing on of ineligible ITC on the basis of bogus invoices issued & received without any actual supply or receipt of any goods or services. These entities had availed ineligible ITC amounting to Rs. 580.23 Crores and had passed on ineligible ITC amounting to Rs. 579.76 Crores. The total quantum of the fraud committed involves GST amounting to Rs. 1,159.99 Crores.

In a separate operation, the officers of DGGI – Mumbai Zonal Unit also arrested one Shri. Deepak Kumar Prajapati, Director of M/s. Udyog Kiran Ltd. Acting on intelligence indicating that the company had fraudulently availed & utilised, as well as passed on ineligible ITC on the basis of fake invoices received & supplied without any actual receipt or supply of any goods or services, investigation was initiated into M/s. Udyog Kiran Ltd. The subsequent investigations revealed that the Director of M/s. Udyog Kiran Ltd. had setup an intricate web of over 22 firms that indulged in circular trading for the purpose of artificially inflating their turnover so as to avail higher bank loans & credit facilities. Based on the investigation conducted till date, it has been noticed that the firms operated by Shri. Deepak Kumar Prajapati have passed on bogus ITC amounting to approximately Rs. 126 Crores and have availed ITC amounting to Rs. 94 Crores. The total fraud involves GST amounting to Rs. 220 Crores.

As per Section 132 of the CGST Act 2017, issuance of invoice or Bill without supply of goods or services and wrongful availment or utilisation of Input Tax Credit on a bill/invoice, without any supply of goods or services is an offence. All the above accused three persons have been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) and Section 132 (1) (c) of the said Act and were produced before the Hon’ble Court. All the three accused have been remanded to judicial custody till 07/12/2020. Further investigation is in progress.

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On the basis of initiative taken by the Chief Commissioner, Meerut, Data Analytics team analysed suspected firms. They passed on an information on the basis of which CGST Meerut unearthed a case of issuance of fake GST invoices without actual supply of goods and passing on the said fraudulent ITC to the other existing firms after circulation of invoices through a chain of fake firms/ companies which are non- existing. These firms/ companies were operating from a small Janta Flat in Rohini Sector-6, New Delhi.

The modus operandi, inter alia, involved not only creating fake firms/ companies by misusing the IDs of different people but also purchasing non-active companies from others and getting the names of directors changed and using these for fake GST billing purposes. Before passing the ITC to ultimate business buyers, ITC was rotated multiple times among the non-existing firms and companies to make it difficult to find the trail.

Against these fake invoices, ITC was passed on to existing firms/ companies for further utilization in the payment of GST. The end recipients from these fake firms made payment through Bank which was subsequently withdrawn and returned back to those end recipients in cash after deduction of certain commission. On preliminary scrutiny, it appeared that the accused namely Shri Pradeep Kumar (kingpin) and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad had taken multiple GST Registrations at common address using common email ID and mobile number.

During the search conducted at Meerut, Moradabad and Delhi, incriminating records, cash of Rs. 9.56 lakhs, flex boards of several firms, rubber stamps of various firms/ companies, digital signature dongles, Credit / Debit Cards with different names, photographs, Bank chequebooks, PAN cards etc. have been recovered & seized.

The offence committed by the accused Sh. Pradeep Kumar and his associates Shri Mohd. Shamshad and Shri Mohd. Sajjad is covered under Section 132(1)(b) & (c) of the CGST Act 2017, falling in the category of cognizable and non-bailable offence under Section 132(5) and the same is punishable under Section 132(1)(i) of the said Act. Accordingly, the above 3 accused were arrested under Section 69 of the CGST Act, 2017 on 20.03.2020 and produced before the Economic Offences Court at Meerut. They have been sent to jail on judicial remand for 14 days on 21.03.2020 by order of the Special CJM, Meerut. Further investigations are underway.

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One person has been arrested on 19.02.2020 and remanded to judicial custody of 14 days.

Further investigations in the matter are in progress.

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The GST revenues during the month of December, 2019 from domestic transactions has shown an impressive growth of 16% over the revenue during the month of December, 2018. If we consider IGST collected from imports, the total revenue during December, 2019 has increased by 9% in comparison to the revenue during December, 2018. During this month, the IGST on import of goods has seen a negative growth of (-) 10%, but is an improvement over (-) 13% last month and (-) 20% in the month of October.

The government has settled ₹ 21,814crore to CGST and ₹ 15,366crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of December, 2019 is ₹ 41,776 crore for CGST and ₹ 42,158 crore for the SGST.

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