GST fraud: Lady mastermind, 3 chartered accountants among 36 offenders arrested by tax officials

Tax authorities have arrested 36 people in connection with the use of fake GST bills that were used in fraudulently availing the input tax credit (ITC). The nationwide crackdown on the use of fake GST bills has led to the arrest of 3 chartered accountants so far, including the arrest of a lady mastermind from Chennai and a chartered accountant in Telangana on Thursday, writes ETV Bharat, Deputy News Editor Krishnannd Tripathi.

New Delhi:In one of the biggest nationwide crackdown against the use of fake GST bills, tax authorities have so far arrested 36 accused persons involved in the issue of fake GST invoices that were used in fraudulently availing the input tax credit (ITC), ETV Bharat has learnt.

The drive, which started on November 9, was suspended on November 13 on account of Deepawali but later resumed after the festival, led to arrest of 3 chartered accountants so far, including the arrest of a lady mastermind from Chennai and a chartered accountant in Telangana on Thursday.

"Today, the officials of Directorate General of GST Intelligence (DGGI) have arrested six offenders, including one chartered accountant, and also a lady mastermind from Chennai," said a source.

"With the arrest of six people on Thursday, total 36 offenders have been arrested and tax officials have booked 519 cases against 1,736 entities," the source told ETV Bharat.

Sources, on the condition of anonymity, told ETV Bharat that today two arrests have been made in the NCR, one each by Delhi and Meerut zones of DGGI and two arrests were made by Hyderabad Zonal Unit, out of which one is a professional (CA).

Tax officials arrested a lady mastermind Sagila M from Chennai, while one offender was arrested from Ahmedabad as they raided offices and premises in 19 cities.

Raids were conducted in Chennai, Ahmedabad, Nagpur, Visakhapatnam, Siliguri, Patna, Bhopal, Surat, Hyderabad, Nagpur, Raipur, Bhubaneshwar, Jaipur, Ghaziabad, Ludhiana, Delhi, Bengaluru, Mumbai and Kolkata.

Chennai's lady mastermind

Officials said Chennai based Sagila M was running a web of 7 fake entities created and operated by herself in the names of her family members (including her recently deceased mother-in-law), relatives and friends.

A case was booked against her firm MS Traders & others for availing and passing on fraudulent input tax credit of Rs. 14.87 crore on fake invoices of MS scrap.

During the search operation at her 8 premises in Chennai, tax officials discovered that she had procured identity documents from her relatives and friends for a payment of a petty monthly sum.

"Based on the documentary evidence gathered and the voluntary depositions of the identity lenders, the lady was arrested," said an official.

In North, officials from Meerut Zonal unit of the DGGI arrested Daman Thakral. Thakral was running three fake firms, Nagpal Bros, Kumar & Sons and Nandi Sales in the name of his employees.

Officials said these firms were used in passing on the fraudulent input tax credit on the basis of fake GST invoices. These GST invoices were issued on various goods, such as iron sheet, MS ingot, MS channel, PVC granules, papers, electronics items (lamp & light fittings), iron & aluminium scrap etc.

"The ITC was utilised by another four firms registered in the name of the mastermind and his brother," said an official.

CA, GM Finance arrested in Telangana

While in Telangana, Hyderabad Zonal Unit of the DGGI booked a case against Kineta Global Ltd. for availing fraudulent ITC on fake invoices without receipt of any supply of works contract service, cement, steel etc.

Officials arrested two offenders, B. Venkateshwarlu, GM (Finance & Accounts) of the company and B Srinvasa Rao who is a Chartered Accountant.

In national capital Delhi, officials of the CGST Delhi Zone unearthed another beneficiary of fake GST invoice in an ongoing investigation which involved 46 bogus companies which were used in fraudulently passing the input tax credit of about Rs 194 crore.

In this case, the officials have already arrested the operators and proprietors of the two beneficiary firms.

Officials said further probe revealed that a trader of hardware goods, Raghav Agarwal, who is the proprietor of Dreamz International, also availed inadmissible input tax credit from these firms.

"A case has been booked against Dreamz International," said an official.