EOW busts two GST frauds, eight arrested

New Delhi: The Economic Offences Wing (EOW) has unearthed two separate GST fraud cases and arrested eight people.

In the first case, police busted a Rs 128-crore fake GST invoicing racket and arrested six people for allegedly operating shell entities and generating fraudulent invoices to claim wrongful input tax credit (ITC) of Rs 10 crore.

The fraud came to light after a man complained that his personal and financial documents were obtained on the false promise of securing him a job in the GST department and were later misused to create a firm.

“Analysis of GST records, banking transactions and digital evidence revealed that Dilip Kumar and Raj Kumar Dixit were the main conspirators,” said additional commissioner of police (EOW) Ravi Kumar Singh.

Police identified the other accused as Amar Kumar and Vibhash Kumar Mitra. In addition, Nitin Verma, Mohammad Waseem and Abid were found to have provided banking credentials. Dixit, Amar, Mitra, Verma, Waseem and Abid were arrested on Friday.

According to police, Dixit, who studied up to Class IX, was involved in masterminding the creation of over 250 shell companies. Amar and Vibhash, who failed to qualify as chartered accountants, were working in accounting roles and allegedly assisted in the fraud. Police recovered around Rs 51 lakh in cash.

In the second case, a chartered accountant and an MCom graduate were arrested for allegedly routing money through dummy firms and accounts.

Police said a complaint was received on Aug 6, 2020, from a man who alleged that his firm’s VAT/GST credentials were misused to carry out transactions worth around Rs 28.4 crore without his consent.

“Amounts credited from various entities were immediately withdrawn in cash or transferred to multiple beneficiary accounts through RTGS, NEFT and other banking channels, without any corresponding genuine business activity,” said DCP (EOW) Subodh Kumar Goswami.

Investigators found that dummy firms and accounts were allegedly operated with the assistance of accused Atul Gupta, a chartered accountant, and late Prakash Gupta. GST returns and statutory compliances of the suspected firms were allegedly filed through a CA firm, while GST dues and penalties were deposited through employees’ personal accounts before being reimbursed later, police said.

Atul Gupta and Rajeev Kumar Parasar were arrested on Tuesday.