The Directorate General of GST Intelligence (DGGI) has arrested two persons for being involved in fake invoices racket. The taxable value of these invoices were Rs 931 crore and they fraudulently availed the Input Tax Credit (ITC) amounting to Rs 127 crore through a complex web chain of various entities, said a statement by the Ministry of Finance. The two persons – Gulshan Dhingra, resident of Ramesh Nagar, New Delhi and Sanjay Dhingra, resident of Punjabi Bagh, New Delhi — were arrested by the Gurugram Zonal Unit of the DGGI. The accused are said to have formed separate entities in the name of their employees or dummy persons and generated fake invoices without actual movement of goods, namely ferrous/ non-ferrous scrap, ingots, nickel cathode, etc., thereby causing loss to exchequer by evasion of GST.
The statement also says that Gulshan Dhingra and Sanjay Dhingra availed this fraudulent ITC to offset their GST liability and also passed on such fraudulent ITC to further buyers who availed the same to discharge their GST liability against their outward supplies with a motive to defraud the Government exchequer. During the course of the investigation, their employees and dummy persons did not admit to knowing about the movement of the above mentioned goods.
The above crime has been classified as cognizable and non-bailable offences and after producing the accused before Judicial Magistrate in Gurugram Court on 07 October 2019, they have been sent them to judicial custody till 19 October 2019 for further investigation.
The incident has come to light only three days after a racket of generating fake GST invoices for fraudulently claiming the input tax credit on non-supplied goods was busted in Pune, where two persons were taken into custody. The alleged fraud was believed to be around Rs 700 crore. The two firms – M/s Reliable Multi trading and M/s Himalaya Tradelinks- had obtained GST registrations and together issued fake GST invoices of approximately Rs 700 crore with the GST component of Rs 54 crore to facilitate bogus input tax credit.