CGST arrests Modasa businessman over Rs. 17.5 crore fake ITC claim

In a major action against GST evasion, the Central GST (CGST) has arrested Pratik Patel, proprietor of Modasa-based Metro Wire Industries, for allegedly availing fake input tax credit (ITC) amounting to Rs. 17.5 crore. Patel was produced before a Modasa court and has been sent to judicial custody.

Officials said the firm had been under scrutiny for some time. The investigation revealed that Patel allegedly floated multiple shell entities in the names of family members and close associates. These entities, reported to include Royal Industries, Khush Industries, Royal Steel Industries, and Bhagyoday Enterprises, are accused of issuing bogus invoices without any actual movement or supply of goods, enabling fraudulent ITC claims.

So far, investigators have identified around 10-15 such firms. CGST officials cautioned that the total quantum of fraud may cross Rs. 20 crore as the probe widens. “The accused attempted to game the system by creating a network of fake companies and paper invoices,” a senior CGST official said, adding that further arrests and recoveries have not been ruled out.