DGGI unearths Rs. 20 crore GST Evasion Scam in Chewing Tobacco Business

The Directorate General of GST Intelligence (DGGI)‘s Ahmedabad zonal unit has unearthed Tax evasion of Rs.20 Crore through GST fraud in the chewing tobacco business.

JD International, a firm based in Ahmedabad fraudulently availed input tax credit and claimed IGST refunds, as per sources. The manager of the firm, Harsh Patel was arrested.

“According to intelligence received and developed by unit officers, it appears that JD International, owned by Dipesh Jain and controlled and managed by Harsh Patel, procured Baghban chewing tobacco. Dispatch records revealed that the consignment was sent to two manufacturing companies to be processed on a job-work basis,” a source said.

The purchases that were shown by the taxpayer in the books (the purchases of Baghban brand tobacco) was fraudulent as they issued invoices without the actual supply of goods, the investigation revealed.

Search operation conducted by the team of DGGI Ahmedabad at 15 locations, resulted in the recovery of incriminating documents.

While investigating it was found that about Rs.20 crore input tax credit (ITC) was obtained illegally, which was later claimed as IGST refund based on the export of branded tobacco.

According to sources, these facts were supported by the statements of company workers, suppliers, agents, and suppliers. On October 13, Patel was detained and appeared in court. For 14 days, he was remanded in custody.