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GST - 2 arrested for Rs 931 Cr ITC abuse

Published: Oct 09, 2019

By TIOL News Service

NEW DELHI, OCT 09, 2019: IN keeping with the latest fad of ITC abuse and with the magnitude of the tax evaded only going northwards, two persons were arrested by the Directorate General of GST Intelligence (DGGI), Gurugram Zonal Unit (GZU), Haryana for their involvement in a fake invoice racket. The taxable value involves is a whopping Rs 931 crores. The two accused were also charged with fraudulently passing ITC of about Rs 127 crores through a chain of entities.

Many of these entities were under their control and they also formed separate entities in the name of their employees/ dummy persons and generated fake invoices without actual movement of goods, namely ferrous/ non-ferrous scrap, ingots, nickel cathode etc., thereby causing loss to exchequer by evasion of GST. They availed this fraudulent ITC to offset their GST liability and also passed on such fraudulent ITC to further buyers who availed the same to discharge their GST liability against their outward supplies with an ulterior motive to defraud the Government exchequer. During the course of investigation, their employees/ dummy persons admitted of having no knowledge of movement of above mentioned goods.    

Thus, the two accused, Mr Gulshan Dhingra and Mr Sanjay Dhingra, were charged with offences under the provisions of Section 132(1)(b) & (c) of the Central Goods & Services Tax Act (CGST), 2017, which are cognizable and non-bailable offences and punishable under Section 132 of the CGST Act, 2017. Consequently, they were arrested on October 07, 2019 under Section 69(1) of the CGST Act, 2017 and produced before Judicial Magistrate in Gurugram Court on October 07, 2019. The Court has sent them to judicial custody till October 19, 2019. Further investigation in the matter is in progress.