Mastermind behind 212 Shell companies arrested by GST Intelligence Pune 

Pune, 3rd August : The Directorate General of GST Intelligence (DGGI), Pune Zonal Unit has arrested Shirish Shah (50) of Mumbai, who is the Manager, Operator and Controller of more than 200 Shell companies.

In case of only one of these 212 companies i.e. M/s Allied Computers International (Asia) Ltd. (in short M/s ACI) has issued fake invoices of Rs. 70 Crores and Rs. 7.30 Crores collected as Service Tax has not been paid to the Government.

Intelligence developed by the DGGI, Pune Zonal Unit indicated that M/s ACI holding Service Tax Registration is a Shell company which is raising Tax invoices charging Service Tax without providing any service and moreover these invoices are further being used by big companies viz M/s Designtech Systems Ltd (in short M/s DesignTech) and M/s Skillar Enterprise India Private Ltd., New Delhi (in Short M/s Skillar) for taking input credit.

“These big companies are part of a Tripartite Agreement entered in the year of 2015 between Andhra Pradesh State Skill development Corporation (in short APSSDC), M/s DesignTech and M/s Siemens Industry Software India Ltd. (in short M/s Siemens) for setting up and operating Skill Development Centers in the State of Andhra Pradesh. It is astonishing to reveal that Government contracts are subcontracted to companies like M/s ACI which do not exist. Under the said contract funds of more than Rs. 300 Crores were received in advance by M/s DesignTech and subsequently more than Rs 200 crores were transferred to M/s Skillar by M/s DesignTech, out of which M/s Skillar has misutilised the invoices raised by M/s ACI charging service tax amount for routing the public funds in illegitimate manner. All these appear to have been done by three other players in this fraud under the guidance and influence of Shirish Shah who revealed the complete money trail.

Investigations also revealed that M/s ACI is a SHELL company with no office and operated by Shah from one of his office premises situated at Dhobi Talao Road, Mumbai. He has entire control over issuing Tax invoices charging Service Tax without providing any service amount received against the said Invoices was also found deposited in the bank account ACI from the respective companies. Shirish Shah accepted that these kinds of arrangements are only made to routing of funds through layering of various existing / non existing companies.

Such unscrupulous acts not only cause evasion of Government revenue, but also distort government schemes and projects which are being awarded to private companies. Needless to say, the Government revenue is used for developmental, defence and welfare schemes for the ordinary citizens of India and such white collar crimes weaken the Government resources, besides defeating the policy objectives of the Government.

The investigation was carried out by Ajitkumar Karthikeyan, Senior Intelligence Officer, Ajit Limaye and Kundan Pratap, Intelligence Officers of DGGI under the guidance of Vaishali Patange, Deputy Director, DGGI, Pune Zonal Unit.

The mandate of DGGI is to nab the economic offenders involved in evasion of GST, Central Excise duty, Service Tax and Customs duty. The enforcement actions by DGGI Officers protect the law abiding citizens who bear the burden of tax.

The DGGI welcomes everyone who provides information about evasion of indirect taxes, viz. GST, Central Excise duty, Service Tax and Customs duty. Pune Zonal Unit of DGGI may be contacted at [email protected]