DGGI Uncovers Rs. 21.64 Crore GST Evasion Scam in Harihar, Key Accused Arrested

On Saturday, the Directorate General of GST Intelligence (DGGI), Belagavi zonal unit, unearthed a massive GST evasion worth Rs. 21.64 crore. This scam is associated with a business in Harihar, Davanagere.

The investigation revealed that the company issued fraudulent invoices amounting to Rs. 112 crore and later used this in claiming and utilising bogus Income Tax Credit (ITC) worth Rs. 17.14 crore. The scam was orchestrated by an individual recognised as Mohammad Saqlain.

DGGI arrested Saqlain on Friday, under Section 69 of the CGST Act, 2017, and thereafter obtained before the JMFC Court, which then sent him back for 14 days of judicial custody.

The Directorate General of GST Intelligence (DGGI) in its statement said, “During the inspection, Mohammad Saqlain, identified as the key person responsible for the operations of the firm, was confronted with evidence collected by the department. He admitted fraudulent availment of ITC on the strength of fake bills.”

The accused has also admitted to making a short payment of GST of Rs. 4.50 crore under the reverse charge mechanism (RCM), resulting in an increment of the total GST evasion amount to Rs. 21.64 crore.

Probe uncovered that the accused in large quantities purchased metal scrap from unregistered suppliers, where claiming Input Tax Credit (ITC) is not allowed. The purchases shown from registered businesses were actually from fake or non-existent firms. The taxpayer is suspected of mixing real transactions with fake invoices to wrongly claim ITC and avoid paying taxes.

During the investigation, DGGI officials also found evidence of fake documents used to obtain fake GST registrations to issue invoices for commission.

Further investigation on the matter is going on, DGGI said.