Two more ITC swindlers arrested
   Date :21-Nov-2020

Two more ITC swindler_1&n
  • The traders duo hailing from Raipur and Raigarh defrauded the Government of its legitimate GST revenue to tune of Rs 38 crore
  • Till date, fake ITC cases of Rs 250 cr busted; recoveries of over Rs100 cr accomplished along with the arrest of five GST evaders
In another major crackdown against tax swindling, sleuths from the Directorate General of GST Intelligence (DGGI, Raipur Zonal Unit (RZU) on Friday arrested two traders from Raipur and Raigarh district respectively for evading GST liability to the tune of Rs 38 crore against facilitation of fictitious and ineligible Input Tax Credits (ITC) valued over Rs 230 crore.
The arrested traders, identified as Rakesh Sharma of Raigarh and Naresh Ishrani of Raipur, were produced before the court of Chief Judicial Magistrate (CJM), which sent them, to Central Jail under Judicial Custody Remand (JCR) till December 3, 2020.
Well-placed sources in DGGI, RZU told The Hitavada that the arrest was part of ongoing investigations in respect of availment and transmission of fraudulent ITC by fictitious firms registered in Raipur Chhattisgarh purportedly engaged in trading of coal.
“It was efficaciously proved after intensive investigation cautiously carried out even during the pandemic situation that bills generated by several of such physically non-existent trading firms registered with the GST department using the identity credentials of different persons, had been grossly misused to pass on fake ITC to consumers of coal by documentarily channelising it through a chain of such firms,” the sources said, adding further that the bills and Invoices fraudulently generated to purportedly cover supply transactions of coal, primarily facilitated in circulation or transmission of fictitious and ineligible ITCs worth several crores.”
According to the sources, the DGGI sleuths’ investigations were eventually zeroed at Rakesh Sharma, the owner/operator of three trading firms in Raigarh, Chhattisgarh as well as Raipur-based Naresh Israni, the veiled operator of more than 20 physically non-existent trading firms. “DGGI through investigations proved that they had been conscientiously involved in operating the racket and during the period between May 2019 and March 2020, thereby, defrauding the Government of its legitimate GST revenue to the tune of Rs 38 crore,” the sources maintained.
The DGGI, RZU, during the course of the investigations, also successfully recovered close to Rs 9 crore in cash from Rakesh Sharma against GST liabilities by way of sporadic, but intensive investigative actions on the fictitious firms as well as the associated persons.
“Furthermore, the officers have also prevented an amount of Rs 16 crore from entering into the fictitious credit chain, by getting that reversed from credit ledgers of the defaulting taxpayers being investigated upon and had also taken initiatives for the blocking of such ineligible credit transmissions to various entities,” the sources added. Eventually, after establishing the conscious involvement of Rakesh Sharma and Naresh Israni in the GST fraud through rigorous interrogations and by confronting the seized records, they were arrested by the DGGI, RZU.
In the meantime, the Additional Director General of the DGGI Unit Raipur, Ajay Kumar Pandey has categorically expressed that even further strict actions against such defaulters would be taken if they do not eschew from committing fake ITC offences.
Meanwhile, DGGI RZU investigations have also revealed that the racket comprised of persons, reportedly from Delhi, who had unlawfully associated themselves with such fictitious trading firms in Raipur, thereby orchestrating the utilisation of such Invoices for accommodating clandestinely procured coal from various sources, to be traded within Chhattisgarh. The consumers of coal who had traded with such firms had either consciously received only the GST Invoices or had received GST tax evaded coal under the cover of such fictitious bills. In either situation, the perpetrators of this fraud had been facilitating the user taxpayers with ITC of the taxes and Cess on Coal, which although at no point of the transaction trail had been credited to the Government Account. The DGGI sleuths of the Raipur Zonal Unit, over the last couple of months had been carrying out searches to track down the actual beneficiaries of this GST tax swindle.
The Government of India, Department of Revenue, CBIC, off late had already launched special drive to execute widespread crackdown on all the fictitious ITC racket operating across the country, as the same had been seen to have taken the form of a menace that had been constantly defrauding the government of huge GST revenue causing thereby extensive dent in tax collection.