2 Masterminds arrested in Rs. 10,000 Crore GST Evasion Case

With the arrest of two businessmen based in Haryana on Wednesday evening, the Noida Police claimed to have apprehended the “masterminds” of the Rs.10,000 crore GST fraud case, which first surfaced in June last year, according to senior police officials.

According to Shakti Avasthy, deputy commissioner of crime police, the two suspects illegally claimed over Rs.26 crore in input tax credit (ITC) from the government, which was seized by police from their bank accounts.

Last year on June 1, the Noida police arrested a gang suspected of managing the multi-crore fraud. According to investigators, the gang would register hundreds of fraudulent organisations using stolen or fake identities in order to generate e-way bills and get an input tax credit (ITC) from the government.

Avasthy, who is leading the probe, said the two suspects have been identified as Ajay Sharma (28) and Sanjay Jindal (38), both Sonipat residents who were arrested on Wednesday at their separate homes.

“The two accused are multimillionaires who control metal and scrap companies. They have caused the government significant financial damage over the last three years by fraudulently obtaining ITCs. In order to offset their tax liability, these businesspeople used to claim ITC through bills in the name of fake firms that did not exist and were founded solely for this scam. According to Avasthy, the two were the end claimants of the input tax credit, resulting in a loss of over Rs.26 crore to the exchequer. Police have arrested 32 individuals in the case.

Jindal is the owner and director of M/s Brownie Metal and Alloys Pvt Ltd, a Sonepat-registered company that received bills from 20 shell companies and claimed a credit of Rs.17 crore, he said.

“Sharma, the owner and director of Sonepat-based M/s Crystal Industries, claimed bills from six fake firms and ITC totalling more than Rs.8.5 crore. Earlier this month, the Noida police announced a reward of Rs.25,000 for their arrest,” said Avasthy.

He added that the GST department had already arrested the two accused in Sonepat in July due to revenue loss.

“The GST department detained both of these businesspeople in July of last year, after we gave a list of the gang’s 3,000 bogus firms. They were granted bail after serving two months in Haryana jail. The Noida police have now arrested them on criminal charges for running the scam,” Avasthy stated.

According to police, the suspects have been booked under Indian Penal Code sections 420 (cheating), 467, 468, and 471 (all connected to forgery), and 120 B (party to criminal conspiracy).