Pune: Company Director Arrested For GST Fraud, Major Racket Unearthed

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Pune, 5th March 2021: The Headquarters Preventive Wing of Pune-II, CGST Commissionerate while acting on intelligence has busted a modus operandi of issuing fake GST invoices without receipt or supply of any goods.

According to CGST Commissionerate, M/s Jagdamba Enterprises obtained GST registrations for the trading of goods like Ferrous Waste and Scrap Ingots of Iron Or Steel, Aluminium Waste etc. and issued fake GST invoices of approximately Rs 32 crores with GST component of Rs 5.67 Crores to facilitate bogus Input Tax Credit (ITC) claims and dupe the Govt Exchequer. The accused, Naresh Bansal who is a director of the company, is a part of a racket involving the issue of fake GST invoices to claim a fraudulent input tax credit (ITC) from the government without any receipt or supply of goods.

Deputy Commissioner Sachin Ghagare said, “As per GST laws, ITC can be availed only against taxes paid to the government on receipt of goods or services. However, a firm such as those of the accused exists only on paper and offer bogus transactions without any supply of goods. Such transactions are used by other firms to claim ITC without actual receipt of goods. Bogus LR and E-way Bills have been generated to show the transportation of goods. During the search conducted at their premises, incriminating documents were seized.

It was observed that these documents were fabricated and made according to GST compliance norms to make the transactions appear real. The statements of the accused were also recorded who has admitted to this modus operandi.”

Consequently, the proprietor of the firm Naresh Kumar Banarsidas Bansal was arrested on 02.03.2021 by a team of Headquarter Preventive Unit for an offence committed under the provisions of Sections 132(1)(b) and (c) of CGST Act, 2017 which is cognizable and non-bailable and produced before the Court on the same day. The accused were remanded under Judicial Custody by the court for 14 days.

“Further investigations in the matter regarding the involvement of other firms and financial transactions between these firms are in progress. The Central GST Department is monitoring such fraudulent activities and will take stringent action against people indulging in such activities to defraud the government exchequer”, Ghagare added.

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