5 Firms accused of Fake GST Billing Fraud; 5 People arrested

The Rajkot Detection of Crime Branch (DCB) registered an offence against 15 enterprises, including Ahmedabad-based DA Enterprise on Wednesday. They are accused of obtaining fake input tax credits (ITC) and causing a financial loss of Rs.61.38 lakh to the government.

The complaint was filed by superintendent of CGST’s anti-evasion section in Rajkot, against Parmar Enterprise Rajkot, Yash Developer Rajkot, Ikara Enterprise Rajkot, Civil Plus Engineering Junagadh, Dhanshree Metal Rajkot, DA Enterprise Ahmedabad, Aryan Associate Veraval, Jyoti Infrastructure Surat, Arham Steel Bhavnagar, Riddhi Infrastructure Gandhinagar, Aashapura Trading Rajkot, Shiv Milan Plastic Rajkot, Ma Durga Steel Shubh Labh Estate Mehsana, Maruti Nanandan Construction Junagadh, and Lakhubha Nanubha Jadeja Jamnagar.

The owners of all of these businesses were accused under IPC provisions for defrauding, forgery, and forming a criminal conspiracy.

According to the complaint, Parmar Vishalbhai Pravinbhai registered a company named Parmar Enterprise with the GST using a rent agreement that was later discovered to be fraudulent. This firm’s registration was cancelled in June 2023. The data analysis revealed that this unit was involved in the receipt and transfer of fake ITC by issuing fake invoices without supplying any goods.

The complaint also said that five entities in Gujarat, Uttar Pradesh, Tamil Nadu, and Chhattisgarh were registered under the same PAN. Parmar Enterprise of Rajkot allegedly obtained an ineligible ITC of Rs.54 lakh via a fake invoice from MN Enterprise without the transportation of goods. This Parmar Enterprise issued fake ITC to 12 businesses. The CGST also secured the suspicious e-way bills used to claim this ITC.

Parthrajsinh Gohil, deputy commissioner of police (DCB), stated that “three companies booked here, including DA Enterprise, were involved in a similar type of bogus billing fraud being investigated by the Ahmedabad crime branch.” We raided approximately 14 locations, including Rajkot, Junagadh, Veraval, Bhavnagar, Ahmedabad, and Surat, and seized incriminating documents.”

“We got details regarding another four to five more firms that are involved in this kind of fraud, and we will soon book them,” Gohil told reporters.

The police have so far arrested five people, including Aman Karani, Aman Rafiqbhai, Saiyad Majidbhai, Vishal Parmar, and Parth Parmar, who were involved in the fake rent agreement and bogus billings.