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New Delhi, March 3, 2020
Officers of Anti-Evasion, Central GST Delhi East Commissionerate said they had unravelled a major operation of circular trading, involving the use of fake invoices to claim fraudulent refunds of Input Tax Credit.
The accused Asif Khan, Rajeev Chhatwal and Arjun Sharma were allegedly operating a total of 17 fake firms, procured invoices without the actual supply of goods and availed as well as passed on ITC fraudulently, to the tune of Rs 436 crore, an official press release said.
The fraudulently availed ITC was used by them to file refund claims to the tune of Rs 11.55 crores under Inverted Duty Structure. The refund claims were also filed by fake firms floated by the accused persons, it said.
The accused persons are related to each other by marriage and were evading investigation for the last one month. During the investigation, it came to light that a major hawala operation was being run by the accused persons in connivance with certain bank employees (under investigation), the release said.
The 17 firms existed only on paper and had been floated for the express purpose of passing on ITC by the generation of fake invoices. Companies on both sides of the transactions, recipient as well as supplier, were found to be non-existent.
Certain businessmen were also under investigation for taking entries from the accused persons for the purpose of money laundering. It was further learnt that Asif Khan was running a similar operation even during the erstwhile VAT regime, the release said.
It came to light that the trio was planning to spread their operations to other States at the time they were apprehended, the release said.
"Asif Khan, Rajeev Chhatwal and Arjun Sharma appear to have knowingly committed offences under Section 132(1)(b) and 132(1)(c) of CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132(5) and punishable under Clause (i) of Subsection (1) of Section 132 of the Act ibid. They also appear to have committed offence under Section 132(1)(e) of the Act.
"Accordingly, they were arrested on March 1 under Section 69(1) of the CGST Act, 2017 and remanded to judicial custody till March 13 by the Chief Metropolitan Magistrate in Patiala House Court. Further investigation in the matter is under progress," the release added.