GST dept arrests bizman for Rs 2,100 crore fraud

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The Maharashtra Department of Goods and Services Tax has arrested a Mumbai-based businessman for allegedly defrauding the state by issuing bogus invoices worth Rs 2,100 crore and claiming input tax credit (ITC) worth Rs 185 crore. The accused allegedly floated 30 companies to issue invoices for Rs 2,100 crore without having any actual business or production and based on that he passed ITC worth Rs 185 crore.

ITC is the tax benefit that manufacturers get for the GST they pay on purchase of goods. Unscrupulous traders are often known to issue and receive fake bills to claim ITC, which automatically leads to an inflated turnover, on the basis of which they apply for bank loans. Bogus firms are registered, fake invoices produced without any actual movement of goods, and then these invoices are used to fraudulently claim ITC.

The accused has been identified as Dilipkumar Ramgopal Tibrewal, who is said to be director of Augst Overseas Private Limited; director of Aaryanaman Global; the proprietor of Shagun Fibres; and several other firms.

Investigation by the office of the Joint Commissioner of State Tax, Investigation-B, revealed that Tibrewal registered four firms in his and his family members’ names under the Maharashtra Goods and Services Tax Act and the Central Goods and Services Tax Act. He also allegedly registered 26 other companies in the names of other people. Officials said that using the registrations of these 30 companies, Tibrewal issued bogus sales invoices of more than Rs 2,100 crores without actually supplying any goods or services. And he then passed on fake ICT of more than Rs 185 crore to various companies.

The agency said that this alleged illegal activity caused a serious loss of revenue to the government and the act constituted an offence under the Maharashtra Goods and Services Tax Act / Central Goods and Services Tax Act. “Tibrewal was booked and arrested on Monday morning from his residence in Malad. He was produced before the Esplanade Court and sent to 14 days’ judicial custody,” a GST official said.

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