First Arrest under GST law in Pune by DGGI, Pune Zonal Unit

PUNE 28 OCT 2018 : Directorate General of GST Intelligence (DGGI), Pune Zonal Unit arrested Shri Modsingh Padamsingh Sodha on 26-10-2018 in Mumbai for evasion of GST amounting to Rs. 79 Crores.

He has been ordered Judicial Custody of 14 days by the Hon’ble JMFC Court, Pune. Modsingh Sodha was operating over 10 dummy companies, which had issued fraudulent invoices worth Rs. 415 Crores. No goods were supplied and all transactions were on paper.

GST fraud of around Rs. 80 crores has been detected in this case, which was paid through set-off of fraudulently availed Input Tax Credit on the basis of invoices procured through market without receipt of goods.

This modus operandi of circular trading of invoices also contributes to the general of black money. Investigations were carried out by the Pune Zone DGGI officers based on the specific information that certain persons had taken GST registration and were issuing bogus invoices for passing fraudulent Input Tax Credit (ITC). After analyzing large amount of data, some key players of this racket were identified and simultaneous raids were conducted in Mumbai and Pune by the officers of DGGI, Pune Zonal Unit, which were coordinated and supervised by Ms. Rajlakshmi Kadam, Deputy Director and Shri Prashant Rohanekar, Senior Intelligence Officer. Along with all the officers of DGGI, Pune Shri P M Deshmukh, Shri K R Murthy, Shri D B More SIO, and Shri Himanshu Kushwah and Shri Ankur Singla, Intelligence Officers have played a vital role in the investigation.During the said first round of searches, GST of Rs.2.18 crores was recovered from these dummy companies on the same day when the searches were conducted and in subsequent follow up searches further amount was recovered.

Investigations are going on and it has been found that this is just the tip of the iceberg. A large number of similar entities involved in this fraud have been identified which indicate that it is a much bigger racket and its threads are spread all over India. The amount of fraudulent ITC detected in this case has reached the figure of over Rs.220 Crores and is likely to
further go up. The value of supplies as per the bogus invoices detected till date, is around Rs.900 Crores, which indicates the extent of bogus transactions, which appear to have been also done for inflating turnover of Companies/Firms which may have been utilized to get enhanced credit limits from Banks, thereby laying foundation of a future banking fraud.

The investigation is being carried out under the overall supervision of Additional Director General Shri Rajesh Pandey and Additional Director Shri Vikram Wani.

The Pune Zonal Unit of Directorate General of GST Intelligence is functioning from CTS No 14, Plot No 16A, Phoenix Building, Opp. Residency Club, Bund Garden Road, Pune 411001 and welcomes all citizens to give information relating to any evasion of GST or past evasion of Central Excise duty or Service Tax. Any person giving such information about tax evasion is not only doing a national service but also is entitled to cash reward as per the reward scheme of the Government of India.