DGGI catches exporter companies for defrauding exchequer through fraudulent ITC Claims and cash refund for about Rs.61 Crores.

The Directorate General of GST Intelligence (DGGI’s) officers have developed intelligence about few exporter companies which were engaged in fraudulent availment of Input Tax Credit (ITC) on the invoices of non-existing and fictitious firms or such firms which do not have made any purchases themselves.

Then the ITC so availed was utilized to pay IGST on the export goods, which afterwards got claimed as a cash refund. Thus, the government exchequer was put at a double loss – on one hand, ITC was being obtained on goods where no tax was paid and on the other hand IGST paid from such fraudulently availed ITC got received again as a cash refund. The amount of IGST refund obtained is estimated to be approx. Rs.61 crore.

After this discovery, the DGGI Hqrs. has searched the exporter companies and residence of their owner as well as premises of various supplier companies on March 6, 2020. These suppliers companies were found to have supplied only bills to these exporters, without the supply of goods. The exporters had taken ITC on these fake bills and had taken a refund of the same as the goods were shown to be exported. The controllers of the export firms were arrested on 06.03.2020 by the DGGI. However, the Ludhiana based owner of the supplier firms was on the run and was untraceable. He was not appearing for investigations even after various summons. The said owner of supplier firms appears to be a habitual economic offender and numerous cases have been made against him and his companies. Earlier, he had also been put under preventive detention under COFEPOSA in a case of commercial fraud investigated by the DGRI.

An input very reliable was received that the said person was hiding in Shimla and was staying at a renowned Five Star Hotel. A team of officers got deputed to visit Shimla, which traced him in the said Hotel and arrested him in the morning of October 7, 2020. Subsequent upon his arrest, he was produced before the competent Court and was sent to judicial custody at Tihar Central Jail, New Delhi for 14 days.

With Warm Regards,

CL Bureau.