Rs 118-crore ITC refund fraud case busted, one businessman arrested

The Mumbai zonal unit of the Directorate General of GST Intelligence (DGGI) has busted an Input Tax Credit (ITC) refund fraud case and arrested the promoter of seven companies that fraudulently availed itself of the ITC of Rs 118 crore.  

The Mumbai zonal unit of the GST Intelligence, which is the investigation wing of the GST, apprehended Santosh Doshi, who was controlling and operating the seven companies, namely Amal Overseas, C-Kluster Expotrade, Ekon Crystalmerchants, Meticulous Overseas, Ninad Overseas, Parees Overseas and White Opal Expotrade. 

The accused had set up an intricate web, using various layers of transactions beginning from manufacturers to traders in between, ultimately involving the exporters to facilitate the realisation of accumulated ITC. 

“The modus operandi involved in this financial fraud was that several dummy units were created in the States of Jharkhand and West Bengal on the basis of forged documents. They passed on the said bogus ITC to several shell trading firms acting as intermediary entities situated in the State of Chhattisgarh,” the Finance Ministry has said in a statement. 

“Further, several units were created as exporting fronts in Pune and Mumbai in the State of Maharashtra to whom the units situated in the State of Chhattisgarh supplied fictitious goods purported to be exported. The exporting units were created merely for the purpose of availing themselves of refund in a fraudulent manner,” it added. 

The ministry further stated that in order to nab the mastermind behind the whole channel of financial fraud, DGGI, Mumbai had launched an operation “by searching concerned (sic) CHAs, CAs, CSs, key persons and freight forwarders, and several statements were recorded.” 

It was revealed during operation that Mr Doshi, who is also the MD of Masumi Overseas, was the promoter and operator of the seven exporting firms. 

Mr Doshi was arrested on August 17 and has been remanded to judicial custody. He was arrested by Mumbai Customs in 2016, the ministry has said, adding that further probe in the matter is in progress. 

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