Mumbai, 12 November 2020: Mumbai Zonal Unit of the Directorate General of GST Intelligence, CBIC has arrested Mr. Sunil Ratnakar Gutte, Director of M/s. Sunil Hitech Engineering Ltd., on charges of having fraudulently availed, utilized, as well as passed on fictitious Input Tax Credit, today, 12th November 2020. The Input Tax Credit amounts to Rs. 520 Crores which has been raised on the strength of bogus invoices received and issued without any actual supply of goods or services.
As per DGGI – Mumbai Zonal Unit’s investigation it has been found that a large cartel of companies, have indulged & participated in this fraud. M/s. Sunil Hitech Engineers Ltd. had issued and received fake invoices valued at approximately Rs. 3,000 Crores, and involving ITC amounting to Rs. 520 Crores. Investigations conducted by the DGGI across the country have revealed that the beneficiaries of these bogus invoices are located in all parts of the country, including New Delhi, Hyderabad, Ludhiana, Gurugram, Meerut, Ahmedabad, Kolkata, etc. The investigations have revealed that M/s. Sunil Hitech Engineers Ltd. is one of the key operators involved in the fake ITC cartels throughout India.
In a parallel operation, the DGGI – Mumbai Zonal Unit also arrested Mr. Vijendra Vijayraj Ranka, Director of M/s. Shree Oshiya Ferro Alloy Pvt. Ltd. In pursuance of an on-going investigation, the DGGI – Mumbai Zonal Unit unearthed the bogus transactions being conducted by M/s. Shree Oshiya Ferro Alloy Pvt. Ltd. Subsequent enquiries revealed that M/s. Shree Oshiya Ferro Alloy Pvt. Ltd. had fraudulently issued as well as received bogus invoices without actual supply or receipt of any goods or service to the tune of Rs. 1371 Crores, involving ITC amounting to Rs. 209 Crores. It was also revealed that M/s. Shree Oshiya Ferro Alloy Pvt. Ltd. had made substantial supplies to M/s. Sunil Hitech Engineers Ltd.
These bogus transactions were used not just for generating bogus input tax credit, but also for artificially inflating their turnover so as to gain higher credit limit and bank loans, and also to siphon off funds.
As per Section 132 of the CGST Act 2017, issuance of an invoice or bill without supply of goods or services and wrongful availing or utilisation of Input Tax Credit on a bill/invoice without any supply of goods or services is a cognizable and non-bailable offence.
In light of the massive scale of the frauds committed by M/s. Sunil Hitech Engineers Ltd. and M/s. Shree Oshiya Ferro Alloy Pvt. Ltd., the Directors were arrested under the provisions of Section 69 (1) of the Central Goods and Services Act, 2017 for committing offences under Section 132 (1) (b) and Section 132 (1) (c) of the said Act, and were produced before the High Court. Both the accused have been remanded to judicial custody.