The Directorate General of GST Intelligence (DGGI) in Surat apprehended a resident of Rajkot on Sunday, linked to a fraudulent Input Tax Credit (ITC) scheme estimated at approximately Rs 1,550 crore, which spans seven states. This incident marks the second arrest in this extensive investigation within Gujarat.
The individual, Priyanka Lalit Sadaria, 36, faces charges under Section 132(1)(i) of the Central Goods and Services Tax Act of 2017, pertaining to tax evasion. Following her arrest, she was presented before the Surat district court, which has placed her in judicial custody until April 24.
Earlier, on January 15, the DGGI arrested Bipin Bhanderi, a chartered accountant from Jamnagar, identified as a significant conspirator in the scheme. This action followed a tip-off that led to the dismantling of the fraudulent ITC operation involving a substantial amount of money.
The investigation revealed that multiple GST identification numbers (GSTINs) registered in Arunachal Pradesh were implicated in illicit activities, including the unauthorized generation and claiming of ITC through non-existent businesses. The Input Tax Credit mechanism allows GST-registered entities to claim credits for taxes paid on purchases, thereby minimizing their overall tax obligations and preventing double taxation.
Authorities conducted a thorough analysis of the GSTINs and their connections to Permanent Account Numbers (PAN), uncovering a sophisticated syndicate operating across several states, including Arunachal Pradesh, Maharashtra, Delhi, Uttar Pradesh, Madhya Pradesh, Haryana, and Gujarat.
According to officials, the network utilized a series of fictitious companies established primarily to generate and distribute fake ITC without any actual supply of goods or services. Investigators have identified numerous interlinked chains wherein ITC was fraudulently layered and channeled through various entities to obscure its source. In one instance, ITC amounting to Rs 126 crore was transferred through several successive layers, indicating a coordinated effort to facilitate extensive tax evasion.
The DGGI Surat unit promptly executed a comprehensive search across multiple locations, leading to the recovery of incriminating documentation and digital evidence. Key conspirators provided statements admitting their involvement in managing GST registrations, filing tax returns, and overseeing compliance for numerous fictitious firms.
Based on the gathered evidence, Bipin Bhanderi was arrested on January 15 under the provisions of the CGST Act, 2017. Officials have indicated that Priyanka Sadaria was instrumental in orchestrating the fraudulent ITC network.
The syndicate’s operation involved the establishment of fictitious entities, the generation of false ITC, and its systematic layering and distribution among various firms to create the illusion of legitimate business transactions. Investigations into additional chains involved in similar activities are ongoing.
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