New Delhi, March 7 The anti-evasion branch of the Central Goods and Services Tax (CGST) Commissionerate in Meerut has busted a syndicate that fraudulently claimed input tax credit of Rs 1,048 crore by issuing fake invoices for the supply of goods in the name of 232 bogus firms that were shown to be registered at various places in the country.
Five bank accounts used to park the proceeds of crime by the syndicate have been provisionally attached.
Three persons have been arrested so far for being perpetrators and conspirators in the creation of bogus firms and fake invoices to siphon off money, according to a Finance Ministry statement issued on Thursday.
The total value of the goods shown to be supplied through fake bills in the names of these shell companies is around Rs 5,842 crore.
The investigation was carried out through various analytical tools such as the E-way Comprehensive Portal, Advait and Business Intelligence and Fraud Analytics (BIFA).
The probe revealed that these 232 bogus firms were operated by mastermind Praveen Kumar, who filed the GST returns for all the fake firms. Apart from the common mobile number, which was used to create and manage 91 firms, 10 more mobile phones, and three laptops were impounded from Kumar’s possession.
During the investigation, it came to light that Full Fledged Money Changer Companies (FFMCs) were used for parking/routing of funds generated through fraudulently passed on ITC. Further investigation revealed bulk purchases of around Rs 1,120 crore from two such FFMCs from other FFMCs.
However, no record of further disposal/receipt of the said foreign currency has been recovered during searches. The owners/directors of these two FFMCs could also not produce any record or details of the ultimate recipient of the foreign currency.
None of the firms that issued invoices were found in existence.
However, two beneficiary firms that had availed ITC on the strength of fake invoices were found to be existing. Further investigation into these beneficiary firms revealed that to justify the fake purchases as genuine, they made payments to two accounts belonging to two forex companies engaged in sales and purchase of foreign currency only, and did not deal in the supply of goods/services.
However, various beneficiaries of fake ITC have transferred money to these accounts, purportedly to justify their fake purchase. The accounts used to carry out these fake transactions were provisionally attached under Section 83 of the CGST Act, 2017.
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