Billionaire Businessmen held in 25 Cr GST Fraud Case

In a major development in the Goods and Services Tax (GST) fraud case, the Noida Police announced Wednesday that it has detained two Haryana-based “billionaire businessmen” who allegedly masterminded the multi-crore revenue loss to the exchequer.

The accused are in the metal scrap business and have jointly caused a loss to the government of approximately Rs.25 crore in revenue, according to a senior police officer.

The case, known as the “GST scam,” was brought to light in June 2023 and involves revenue loss to the exchequer as a result of input tax credit (ITC) claims made by thousands of fictitious companies that were registered using forged documents.

According to sources, the police investigation has revealed the involvement of hundreds of fraudulent organisations and transactions totalling over Rs.10,000 crore, and more than two dozen persons have been arrested in connection with the case.

Deputy Commissioner of Police (Crime) Shakti Mohan Avasthy stated that a team from Noida’s Sector 20 police station uncovered a scam and arrested some culprits who were reportedly behind the creation of 2,600 bogus firms.

“In accordance with that case, the masterminds of the racket who fraudulently claimed ITC from the government and caused revenue loss to the exchequer were arrested on Wednesday. The masterminds are billionaire businessmen named Sanjay Jindal and Ajay Sharma,” Avasthy told reporters here.

“Jindal controls AS Brownie Metal and Alloys, which is based in Haryana’s Sonipat area. He unlawfully claimed Rs.16.9 crore of ITC. Enforcement agencies eventually froze this sum. Sharma employed six firms to incur a revenue loss of Rs.8.57 crore. This cash was also frozen subsequently by the GST department in response to a Noida Police report,” the official stated.

Avasthy, who has been leading the inquiry since the case first surfaced, stated that both of the accused are “billionaire businessmen” with “huge businesses” in Sonipat.

Jindal and Sharma had been wanted by the Noida Police for a long time, and the DCP offered a reward of Rs.25,000 each for information leading to their arrest.

“Jindal and Sharma are the masterminds behind the scheme. They were the real beneficiaries of this fraud business of floating bogus firms and claiming ITC on their behalf. So far, we have detained 32 people in connection with the case, and more will be held soon,” he stated.

Police said an FIR was filed at the Sector 20 police station under Indian Penal Code sections 420 (cheating), 467, 468, and 471 (all forgery-related) and 120B (criminal conspiracy).

The Noida Police attached assets worth around Rs.12 crore of the gang members involved in the GST “scam” last month, including immovable properties in different locations in Delhi.

The case came to light in June 2023 after thugs applied for the registration of bogus companies using a journalist’s PAN details and got two firms registered — one in Punjab and one in Maharashtra — while the request for a third such company to be registered in Delhi was rejected by the GST authorities.