CGST Commissionerate Unearths a Racket of GST Fraud and Fake Input Tax Credit of Approx. 99 crores

Based on information shared by the Chief Commissioner Office, CGST & Customs, Meerut Zone, Meerut, the CGST Commissionerate, Ghaziabad initiated an investigation in December 2020 against a firm M/S Jai enterprises and 36 other firms all based in Ghaziabad, leading to the discovery of a racket of GST fraud involving taxable value of Rs. 628 crores approx. and availment and utilization of fake input tax credit of approx. 99 crore During the course of the investigation, this office arrested one member of the racket, Sh. Naresh Kumar, on 21.04.2021 for his active involvement in the fraud, and a complaint to prosecute him was also filed in CJM Court, Meerut.

This office conducted a series of searches on 08/09.03.2022 at approximately 6 (six) more premises in Ghaziabad and Delhi as part of its ongoing investigations. During the investigation, another person named Sh. Roopak Vashistha who was involved in this racket was summoned, and it was discovered that there were 11 bogus firms on Sh. Roopak Vashistha’s registered PAN, involving the availment and utilization of ineligible input tax credit worth approximately 7(seven) crores. It was also discovered that there are over 50 bogus firms in multiple jurisdictions registered on the mobile phone numbers and bank accounts mentioned in the above-mentioned 11 firms. The amount of GST evasion and the number of businesses involved in the case are likely to increase.

Following that, Sh. Roopak Vashistha, who was allegedly involved in the formation of bogus firms in order to obtain and use fraudulent Input Tax Credit (ITC) on the basis of invoices without receiving any goods, was arrested on 10.03.2022 under Section 69 of the CGST Act 2017 for the offences committed under Section 132 of the CGST Act. On March 10, 2022, he appeared before the Special CJM Court in Meerut, where he was ordered to be held in judicial custody until March 23, 2022.

Further investigation is under process.