Moradabad exporter arrested for Central GST fraud of Rs 28 crore, fake bills recovered

In its ongoing crackdown on fake GST (Goods and Services Tax) invoices and Input Tax Credit (ITC) cases, the Customs and Central GST authority in Meerut arrested a Moradabad-based exporter of clutch plates and disc pads for fake invoices to the tune of Rs 28 crore and fraudulently availing ITC of around Rs 8 crore.

The exporter has been arrested and Rs 7.80 crore recovered from him.

This is considered as one of the biggest individual cases of fake invoices under the GST regime in recent months after the Directorate of Revenue Intelligence and Directorate General of GST Intelligence had in nationwide searches in September unearthed fake GST invoices of Rs 3,500 crore and fraudulent claims of over Rs 470 crore of Integrated GST (IGST). The September crackdown covered exporters at 336 locations in 15 states.

Yashovardhan Pathak, additional commissioner, Customs and Central GST, Meerut said the department has recovered entire amount of Rs 7.80 crore fraudulently claimed by the exporter and the investigation is still in progress after which penalty will be imposed on the accused.

Moradabad-based Aamir and Sons and its proprietor Mohd Arif have been accused of obtaining fake invoices from five Delhi-based firms without actual inward supplies.

“Against these fake invoices, Arif availed ITC which he used for payment of IGST against export of goods,” Pathak said. The investigation by the anti-evasion unit of Central GST, Meerut revealed that the accused had used fake vehicle numbers for the e-way bills generated against these fraudulent supplies. The accused had also exported clutch plates and disc pads and used the ITC credits towards payments of IGST on these exports. “He then claimed refunds of the IGST based on fake invoices,” the senior CGST official explained.

The officers of the CGST also attached accounts of the accused and interrogated him. Arif, according to officials, admitted to the fraudulent availment of ITC and also surrendered Rs 7.80 crore that he had received as ITC credits using fake invoices.

Frauds committed under GST regime is a cognizable and non-bailable offence and invites a jail term of up to five years. The accused, Arif, was arrested on Saturday and remanded to judicial custody for 14 days by a local court. The central excise and Customs officials are further investigating the case and in the process of identifying five Delhi-based companies and other accused involved in the fraud.