CGST Officials Busted a Syndicate of 7 Firms in GST Evasion of Rs.85 Crore

CGST Delhi East Commissionerate had exposed a racket of five enterprises that were engaged in availing and utilising fraudulent Input Tax Credit (ITC) of Goods and Services Tax through detailed analysis of E-way bills (GST).

Further inquiry revealed that this syndicate was employing two additional entities, M/s Shree Mahaveer International and M/s Gravity Enterprises. A communication was also received from GST, Gujarat State, stating that a car with registration number DL8CAS5941, registered in the name of one of the syndicate firms, M/s Blue Water Expotrade Private Limited, was intercepted in Ahmedabad. Truck FastTags were put to the car in order to establish a fictitious movement of export commodities from Delhi to Mundra port. M/s Shree Mahaveer International issued the E-way bills for the fictitious supply.

On March 10, 2022, a search was performed at the residence of Shri Rakesh Kumar Jain, proprietor of M/s Shree Mahaveer International and a partner in M/s Gravity Enterprises. In his voluntary declaration, Shri Rakesh Kumar Jain stated that fake bills were received and issued by these syndicate firms without actual provision of commodities.

Shri Rakesh Kumar Jain was clearly employing numerous organisations to obtain and pass on phoney invoices and E-Way Bills without actual provision of products. He avoided paying more than Rs.85 crore in GST.

As a result, on March 10, 2022, he was arrested for violating Section 132(1)(b)&(c) of the CGST Act, 2017 and brought before Metropolitan Magistrate Patiala House Courts in New Delhi.

So far, the CGST Delhi (East) Commissionerate’s investigation has revealed a fake ITC racket run by seven companies: M/s Vibe Tradex, M/s Prime Mark Expotrade Private Limited, M/s Blue Water Expotrade India Private Limited, M/s Transglobe Tradex Private Limited, M/s Tirupati Overseas, M/s Shree Mahaveer International, and M/s Gravity Enterprises. The case is currently being investigated further.