GST Fraud: One Arrested in Massive Fake Billing Scam; Evasion of Tax hits to Rs.205 Crore

The CGST Ahmedabad South Commissionerate’s preventive branch achieved a significant breakthrough in the fake billing fraud when they caught Vihol Viramji, the proprietor of Ashapura Traders, for his involvement in a huge tax fraud scheme.

Viramji is accused of defrauding the government by falsely claiming ITC and dodging taxes of Rs 36.95 crore. This is the fourth arrest in a series targeting trash dealers who participate in tax fraud and the illegal use of phoney invoices.

The cumulative extent of tax evasion now stands at a staggering Rs.205.2 crore, said officials.

The Commissionerate detained Jignesh Patel (39) and Jaysukh Modasiya (46), the proprietors of scrap trading business Jaymin Enterprises, last week for obtaining ITC using counterfeit banknotes. The two planned the fraud with the help of their organisations, using fake invoices to discharge their GST due by illegally receiving ITC. Investigations discovered that Jaymin Enterprises’ acquisitions were just on paper, and transporters confirmed that no products were delivered to the company. They further stated that their car numbers were fraudulently utilised to produce e-way invoices without their permission.

Prior to these arrests, CGST agents nabbed Pravin Kumar, the owner of Nandi Metals, in April. According to trustworthy sources, Viramji, the fourth accused, played a critical role in delivering false bills to Jignesh Patel and Jaysukh Modasiya, allowing them to illegally claim ITC.

The Commissionerate has begun an extensive inquiry into the firms implicated in such fraudulent operations. According to CGST authorities, these companies largely traded scrap metal.

During the inquiry, investigators discovered a network of non-existent or non-operational organisations that sent phoney invoices through a number of firms in order to illegally receive ITC. There are ten shell companies involved in this case. Viramji obtained and used ITC worth Rs 7.22 crore illegally. He was brought before Ahmedabad’s extra chief metropolitan magistrate, who gave him a two-week detention. He will be held in judicial detention until June 13, according to SGST authorities.

A countrywide programme to detect and investigate fake GST registrations is presently ongoing. CGST personnel are closely monitoring syndicates and groups involved in the fraudulent purchase and use of ITC.