Odisha Goods Service Tax enforcement squad has arrested a person for his alleged involvement in generation of fake invoices worth ₹712 crore and passing of bogus input tax credit (ITC) of ₹129 crore.
The accused identified as Kashmira Kumar Agarwal, Director of Madhumita Steels Industries Private Limited, was arrested from Sambalpur.
Mr. Agarwal, who had been under the scanner of State GST Enforcement Squad since long, used to frequently change his address from Rourkela to Haryana and from Jamshedpur to Sambalpur.
The accused had created 14 fictitious firms in name of rickshaw pullers, plumbers and road-side vendors.
“During interrogation, proprietors of these fake firms admitted that they were neither doing any business nor were involved in any purchases or sales in the name of their firms, and the transactions reflected in their returns were only paper transactions without any actual receipt and supply of goods,” said S. K Lohani, Commissioner of Commercial Tax and GST, Odisha, in a statement.
The enforcement squad members had confronted proprietors of fake firms. Proprietors had admitted they were not aware of any business or bank transactions in their names. The mastermind used to carry out transaction through signed cheque books and RTGS forms collected from gullible people. Houses were taken on rent through forged rent documents.
“The accused has transferred huge amount of money to different firms without having any business transactions with them. In the case of one firm, he has shown to have purchased goods worth ₹13 crore but has transferred ₹38 crore to the said firm through its bank account raising suspicion regarding his involvement in money laundering,” it said.
Investigation further revealed that tonnes of goods were shown to have been dispatched to different States through scooters, motor cycles, tractors and cars which was not possible. The squad seized incriminating documents such as rubber stamps, bank account, passbook, pre-signed cheque leafs and ATM cards. Bank accounts in the name of business entities operated by Agarwal having deposits of ₹2.12 crore have also been attached.
“Agarwal has fraudulently availed bogus ITC of ₹113.81 crore and passed on bogus input tax credit worth ₹129.09 crore in the name of the 14 fictitious firms created and operated by him on the strength of fake invoices,” said Mr. Lohani.
