Detection of availment and passing of fake ITC to the tune of Rs. 154 Crores by the issuance of fake invoices to the tune of Rs. 1101 Crores by 206 units sprawling all over India

To,
Shree Vivek Johri
Zonal Member
Central Board of Indirect Taxes & Customs
North Block,
New Delhi.

Respected Sir,

Sub: CIU Intelligence Report: CIU/VZ/9/2020 dated 07.12.2020 – Detection of availment and passing of fake ITC to the tune of Rs. 154 Crores by the issuance of fake invoices to the tune of Rs. 1101 Crores by 206 units sprawling all over India- Regarding.

The officer of the Central Intelligence Unit (CIU) of Vadodara Zone, through intensive data mining and detailed investigations of series of taxpayers, have busted All India Racket of 206 fake entities, sprawling over 10 states and 23 Commissionerates in India, who have illegally issued fake invoices to the tune of Rs. 1101 Crores and passed on the fake Input Tax Credit of about Rs. 154 Crores.

2. The officers of the CGST Surat Commissionerate under Vadodara Zone, acting on this intelligence, proceeded against 40 fake units in Surat Commissionerate and arrested a person, Shri Karan Pratapbhai Dodiya. The investigations revealed that 206 fake regostrations contained the bank account number operated by Shri Karan Pratapbhai Dodiya and in Surat  CGST Commissionerate, 11 firms have been taken ineligible fake credit to the tune of Rs. 7.17Crores and passed on illegal fake credit to the tune of Rs. 4.91 Crores.

3. The investigation revealed that these 206 fake entities have been created  by a mastermind and kingpin in 10 States and 23 Commissionerates. The officers of Surat CGST have also booked a case of fake invoices and fake input tac credit by M/s. Dasrath Trading, in which Rs. 7.98 Crores of illegal GST credit availed had been passed on. The arrested person also have been investigated and found to be a link in passing on the ineligible ITC in the case of M/s. Dasrath Trading and other firms.

4. The illegal fake entities had been filing the GSTR-1 returns without discharging the duty liability in GSTR-3B retruns. In this process, this all India racket had issued the fake invoices of more than Rs. 1101 Crores, and thus, passed on fake credit to the tune of about Rs. 154 Crores to the various users.

5. The person Shri Karan Prathapbhai Dodiya in the capacity of operator of these 206 fake firms has been arrested today under Section 69 of the CGST Act, 2017, as he appearred to have committed the offences under Section 132(1)(b) and 132(1)(c) of the CGST Act and punishable under Section 132(1)(i) of the CGST Act and the said offences under Section 132(5) are cognizable and non-bailable. The arrested person was sent for conducting rapid test of Corona, and thereafter was produced before the competent Chief Judicial Megistrate, who has remanded for his 14 days judicial custody.

6. Further investigations in the case countrywide are in progress.