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Crypto Exchange WazirX Raided For GST Evasion. Read Complete Details Here

The Mumbai East Commissionerate of GST said that the country’s largest crypto exchange WazirX, which deals in cryptocurrencies, was evading GST for a long time. Revealing the tax evasion of these crores, the officials have now recovered a fine of more than Rs 49 crore after levying interest and penalty on the exchange. According to the information shared by the GST Commissionerate on the official Twitter account, WazirX had evaded GST worth 40.5 crores. In this case, an amount of Rs 49.2 crore has been recovered as penalty and interest.

Officers of CGST Mumbai East comm'te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai

— CGST Mumbai Zone (@cgstmumbaizone) December 30, 2021

WazirX’s trading volume increased

Recently, WazirX, sharing information on social media, said that its trading volume has increased by 1735 percent. The exchange was told that the trading volume has increased to the level of $43 billion. That is, within a year, trades of buying and selling of such value were done through the exchange. This is an increase of 1735 percent as compared to 2020.

Country’s largest crypto exchange

Crypto trading is done through exchanges. Just like a stock exchange is necessary for trading in the stock market, in the same way an exchange is also needed for the transaction of cryptocurrency. In this, WazirX is a favorite among Indian investors. Its popularity can also be easily gauged from this increase in its trading volume throughout the year. According to an earlier report, 15 crore investors in India are registered with the crypto exchanges present in the country.

Thugs Duped Rs 10 Lakh From Doctor By Posing Themselves As GST Officer

Thugs duped Dr. Praveen Singh, resident of Prahladgarhi, by posing as GST officers and duped Rs 10 lakh. The victim alleges that the thugs entered the house and beat them up. In this regard, the aggrieved doctor has given a complaint to Senior Superintendent of Police Pawan Kumar. It is alleged that even then the Indirapuram police did not register the report.

Dr. Praveen Singh lives in Prahladgarhi. He has a clinic in the colony itself. He said that on October 20, three people stood outside his clinic and started asking about him. As soon as he came to know about it, he panicked and left the clinic silently and went to another place. After this, on October 25, the three people again reached his house and started questioning the family members.

During this, when Dr. Praveen got suspicious of him, he again ran away and reached his friend’s house in Durgapuri Colony of Delhi. But the three people also reached there and beat up him and his friend.

After that put it in the car and brought it to Vaishali. It is alleged that he kept driving the car for a long time. During this, the accused showed the fear of taking action by posing themselves as officers of GST. Threatened to be put in Meerut jail, demanded Rs 30 lakh. On this, when the victim expressed his inability to give so much money at once, he was intimidated. Dr. Praveen told that one of his acquaintances immediately after coming to know about the incident arranged 10 lakh rupees and gave it to the three people. After this they dropped him in Sahibabad Industrial Area Site-4. Victim Dr. says that he had complained to Senior Superintendent of Police Ghaziabad Pawan Kumar. He had directed Indirapuram police station in-charge to take action on October 30. Dr. Praveen’s allegation that the police has not yet registered a report in the case. Circle Officer Indirapuram Abhay Kumar Mishra says that the complaint is being investigated.

Country Needs to Come Out of this Tax Culture that “All Businesses are Fraudulent”: Supreme Court

In a case, Justice Chandrachud today said that “The country needs to come out of this tax culture that ‘all businesses are fraudulent’.

Even where 12 crore tax has been paid (by the assessee), just because some tax is still due, you can’t start attaching property! If there is any alienation of assets or the assessee is winding up or going into liquidation, it is understandable. But just because you have the account numbers, you can’t start attaching and even block the receivables!”

GST Department Finally Caught the Fraudster Who was Hiding Himself from the Department

GST Department Finally Caught the Fraudster Who was Hiding Himself from the Department

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana, has arrested Shri Ravinder Kumar (aka Ravinder Garg), resident of New Delhi on charges of creating and operating fictitious firms on forged documents which were used in availing of and passing on Input Tax Credit on bogus Invoices without actual receipt and supply of goods or services.

It is apparent from the investigation conducted till date, that Shri Ravinder Kumar created multiple proprietorship, partnership firms and private limited companies based in Haryana, New Delhi and Jharkhand merely on paper. Shri Ravinder kept eluding the investigation and did not appear before the investigating authorities even after issuance of Summons on multiple occasions.

Shri Ravinder was absconding and kept changing his locations, the officers kept watch on his frequent places and after a long period of monitoring and active surveillance, were able to nab him. He admitted to have created two Private Limited Companies, one partnership firm and multiple proprietorship firms which have generated sham invoices without goods amounting to Rs. 237.98 crore and passed on fake ITC amounting to more than Rs 43 crore.

The investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement recorded, it was established that Shri Ravinder Kumar is the key person in orchestrating this racket of creating fake firms on forged documents. Accordingly, Ravinder Kumar was arrested on 09.03.2021 and produced before the Metropolitan Magistrate, New Delhi, who ordered 14 days judicial custody.

Only question is when will these frauds stop??

CGST Delhi Arrests Two Persons For Causing Loss to Revenue Worth more than Rs 392 Crore

CGST Delhi Arrests Two Persons For Causing Loss to Revenue Worth more than Rs 392 Crore

In their continuous endeavour to uproot fake billing operations, officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi (East) achieved yet another success when investigations led to unearthing of a massive network of fictitious firms to generate and avail fake Input Tax Credit (ITC) of Goods and Services Tax (GST). The network of fictitious companies was being operated by one Shri Naresh Dhoundiyal in connivance with one Shri Devender Kumar Goyal, who is a Charted Accountant by profession. Both Shri Naresh Dhoundiyal and Shri Devender Kumar Goyal are former employees of Essel Group. Though they are presently not working with the Essel group officially, however, they are passing on inadmissible ITC to the said group. Investigations indicate that a layer of genuine looking fictitious intermediatory companies was created to pass on bogus ITC from non-existent and fake firms to the companies of Essel Group without actual supply of any goods or services. This was apparently done to enable Essel Group to avail inadmissible Input Tax Credit of GST, book expenses to evade Income Tax and inflate their turnover to push the share prices of their listed companies.

Shri Naresh Dhoundiyal incorporated multiple fictitious intermediatory companies for Essel Group whereas, Shri Devender Kumar Goyal, CA arranged the fake invoices of various other fictitious and non-existent firms for such fictitious intermediatory companies. The total fake Input Tax Credit passed on by such fictitious intermediatory companies is quantified to be Rs. 92.18 crore whereas, the total fake Input Tax Credit passed on by other fictitious and non-existent firms pertaining to the larger network is quantified to be more than Rs. 300 crore. The syndicate has thus defrauded the Government exchequer of more than Rs. 392 crore by issuing bogus invoices of more that Rs. 3,000 crore without actual supply of any goods or services which is likely to increase as the investigation progresses. It is pertinent to mention that M/s Vertilink Media Solutions Private Limited has admitted the evasion and have voluntarily deposited Rs 2.5 crore.

Shri Naresh Dhoundiyal and Shri Devender Kumar Goyal, CA hatched a deep-rooted criminal conspiracy with the intend to defraud the Government exchequer and knowingly committed offences specified under Section 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132(5) and punishable under clause (i) of sub section 1 of Section 132 of the Act ibid. Shri Naresh Dhoundiyal and Shri Devender Kumar Goyal, CA have been arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on 04.03.2021 who remanded them to judicial custody of 14 days till 18.03.2021. Further investigation in the case is in process.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has made 30 arrests in various cases involving GST evasion amounting of more than Rs. 4,450.86 crore.

Fake ITC Fraud: Man Arrested for Availing Fake ITC of Rs 38.91 Crore

Fake ITC Fraud: Man Arrested for Availing Fake ITC of Rs 38.91 Crore

In the ongoing drive to counter the menace of fake billing operators, information from analytics tool NETRA (Network Exploration Tool for Revenue Augmentation), was developed by the officers of Central Goods and Service Tax (CGST) Commissionerate, Delhi East to unearth a network of fictitious firms used to generate and pass on fake Input Tax Credit (ITC) of Goods and Service Tax (GST).

Investigation revealed that the multilayered network was being operated by one Shri Nihaluddin who has confessed to having created a fake firm in his own name and also arranging ITC from 38 other fictitious firms on commission basis to pass on fake Input Tax Credit (ITC) to multiple beneficiaries. The investigation has so far established the issuance of fake bills of Rs 216.06 crore involving fake Input Tax Credit (ITC) of Rs. 38.91 crore, which is expected to increase as the investigation progresses.

The offence committed by the accused Shri Nihaluddin is covered under Section 132(1)(b) of the CGST Act, 2017 which is cognizable and non-bailable offences as per the provision of Section 132(5) and punishable under clause (i) of sub section 1 of Section 132 of the Act ibid. Accordingly, Shri Nihaluddin was arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on 01.03.2021 who remanded him to judicial custody of 14 days till 15.03.2021. Further investigation in the case is underway.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has made 28 arrests in various cases involving GST evasion amounting of more than Rs. 4058.86 crore.

GST Officials Arrested One for Causing Loss to Revenue

GST Officials Arrested One for Causing Loss to Revenue

The Gurugram Zonal Unit of Directorate General of GST Intelligence has arrested a person, namely Mr. Pradeep Jain, resident of Muzaffarnagar, UP who is Director of M/s PSR Metals Pvt Ltd, Muzaffarnagar.

An investigation was conducted against M/s PSR Metals Pvt Ltd located at Khasra No 362/2, Near Begrajpur Industrial Area, Village HussainpurBopada, Muzaffarnagar, UP-251001 by way of visits conducted at the registered address of the said company. During the investigation, Mr. Pradeep Jain, Director of M/s PSR Metals Pvt Ltd. claimed to procure both old and non-guarantee batteries from various registered and unregistered dealers and also claimed to manufacture lead from old batteries and doing trading of new batteries (termed non-guarantee batteries). It is pertinent to mention here that in GST regime, old/scrap batteries are taxed at 18% GST rate and new/fresh batteries are taxed at 28% GST rate. However, verification with their suppliers revealed that they had sold only fresh batteries to M/s PSR Metals Pvt Ltd.

Confronted with these facts, Mr. Pradeep Jain now claimed that they were also manufacturing lead from these new batteries, whereas earlier he claimed only trading of the same. Investigation showed that it was not economically viable to manufacture lead from destroying and breaking down fresh batteries to pick miniscule lead therein. It appeared that they were actually using bazaar scrap to manufacture such lead and was using the ITC of fresh batteries while clearing these new batteries without issuance of invoices.

Thus, Mr. Pradeep Jain, was found to have defrauded the exchequer in excess of ₹ 13.76 crore. by clearance of goods without issue of invoices. He was therefore arrested on 27.02.2021 under section 69 of the CGST Act, 2017. The Magistrate sent him to Tihar Jail for 10 days’ Judicial Custody. Further investigation in the matter is under progress.

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Jodhpur: Fraudster Formed Fake Company in the Name of a Daily Wage Laborer. Investigation Reveals Bogus Billing of Rs. 24 Crore

Jodhpur: Fraudster Formed Fake Company in the Name of a Daily Wage Laborer. Investigation Reveals Bogus Billing of Rs. 24 Crore

Nainaram Meghwal, a daily wage laborer from Dungarpur, a small village near Roht in Pali, was turned into a diamond business worth Rs 23.80 crore by the GST fraud gang. Through a NREGA mate, fraudulent documents were obtained, then opened a fake company in his name and started GST theft and bogus billing.

The laborer living in a mud slum house recently received a notice of outstanding tax of Rs 43.51 lakh from the sales tax. On seeing the notice, the ground slipped under his feet. He lodged a case in Roht police station through the court.

On the other hand, the central GST arrested Dev Adania, the mastermind of the gang that carried out such activities on October 15, but did not touch other such links related to its network. If it were to find some other victims on the ground, the mastermind and his associates could also be subjected to legal tightening.

Nainaram said:

I live in the dung of my village Dungarpur town and live as a laborer. I am illiterate, I only know how to sign. About a year and a half ago, Mate Venaram Patel came to my house and said that getting a PAN card of your name is very useful. Believing him, I gave him an Aadhaar card, identity card and photo. After some time he took me to Roht post office and got PAN card. Then took the PAN card from me on the way. A few days later he took me to Jodhpur, introduced a person there. They both signed some blank papers.

When the notice came, the whole family was scared

On January 1, I got a notice from Assistant Commissioner Karapavanchan from Sales Tax Department in Jodhpur, I was shocked. When I went to the department, the officers told that Tirupati Trading Company has opened in my name. In this, the returns of 23 crore 80 lakh, 59 thousand 932 rupees were filled and the tax arrears of 43 lakh 51 thousand 908 were declared.

Officers said that gold-silver, diamond-gems have been traded in my name.

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CGST Delhi Arrested 4 More Beneficiaries of Loopholes in GST System

CGST Delhi Arrested 4 More Beneficiaries of Loopholes in GST System

In the ensuing initiative to counter the menace of fake billing operations, the officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi North, on the basis of intelligence developed through extensive data analytics, have unearthed a network of fictitious firms to generate goods-less invoices and pass-on fake Input Tax Credit to multiple beneficiaries. In all, four individuals were arrested in three different cases in terms of Section 69(1) of the CGST Act, 2017 for commission of offences under Section 132 (1) of the CGST Act, 2017. The total Input Tax Credit involved in the three cases is Rs. 178 crore. Further investigations in all the matters are in progress and the amount of fake credit and total number of companies/persons involved are likely to increase.

In the first case, four non-existent firms were created by the main perpetrators to pass-on ITC of Rs. 54 crore, primarily to 14 other firms. These firms were not only involved in issuing goods-less invoices on commission basis but also used such invoices for claiming IGST refund on export of goods. The main operators behind all these firms, Shri Vikas Goyal and Shri Gopal Aggarwal have confessed to their involvement in running this web of fake firms and were, arrested on 12.02.2021.

In the second case, investigations revealed that one Sh. Mohinder Kumar received fraudulent GST Input Tax Credit of Rs 111 crore in his two firms, M/s VMW Enterprises and M/s Shree Bahadur Steel Company from several bogus firms and passed on this credit to several other firms without actual supply of goods. Sh. Mohinder Kumar was placed under arrest on 13.02.2021.

In another similar case, one Shri Surender Kumar Jain, Director of M/s VDR Colors and Chemicals Pvt Ltd. & A.V. Metals Marketing Pvt Ltd. and proprietor of M/s Surender Kumar Jain was found involved in availing ineligible ITC of Rs. 13 crore on the strength of goods-less invoices issued by non-existent firms. Shri Surender Kumar Jain was also arrested on 13.02.2021. All the accused have been remanded to 14 days of judicial custody by the Metropolitan Magistrate.

It is pertinent to mention here that since the inception of GST, Central Tax, Delhi Zone has made 25 arrests in various cases involving GST evasion amounting to more than Rs. 3,969.65 crore.

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2 GST Frauds Worth Rs. 445 Crore in Only 5 Days

2 GST Frauds Worth Rs. 445 Crore in Only 5 Days

1.) Man Arrested for Fraudulently Availing ITC of More Than Rs. 69 Crore :

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana has arrested one Shri Surender Kumar Gupta resident of New Delhi on charges of availing and passing on fake input tax credit by way of receipt/issuance of invoices without any actual supply of goods or services.

It is apparent from the investigation conducted till date, that Shri Surender Kumar Gupta, Director of M/s. Mystic Exim Pvt. Ltd., M/s. Landmark Traders Pvt. Ltd. and Controller of M/s. JKM Impex forged documents to show receipt of goods in his above mentioned companies/firms from multiple fictitious/non-existent entities, which never existed at their given addresses. The entities of Shri Surender Kumar Gupta had further passed on the fake ITC to multiple exporter firms, who had further encashed such ITC through fraudulent IGST refunds.

The investigation spanned multiple locations in Delhi/Gurugram and based on documentary evidence and statement recorded, it was ascertained that Shri Surender Kumar Gupta is a key person in orchestrating this racket of availing fake ITC.

Accordingly, Shri Surender Kumar Gupta was arrested on 05/02/2021 and produced before Duty Magistrate, Tihar Complex, New Delhi, who ordered judicial custody. From the investigations conducted till date, it appears that the total value of goods involved in the subject transactions is more than Rs. 600 crore and the total fake ITC availed by entities of the accused is more than Rs. 69 crore.

Further investigations in the matter are under progress.

2.) DGGI Gurugram arrests man for fraudulently availing input tax credit of Rs 376 crore through 7 fake firms :

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana, has arrested Shri Ritesh Aggarwal, resident of Bahadurgarh, Haryana on charges of passing and availment of fake ITC while operating dummy, fake and non existent firms and encashing this unduly availed input tax credit (ITC) through IGST refund mode by showing export of cigarettes.

It became apparent from the investigation that Shri Ritesh Aggarwal, the proprietor of M/s SR Impex was de facto controller of another firm — M/s SR International. In the supply chain of these firm were found to be six other dummy firms by the names of M/s Joles Trading Co, AS Traders, AR Traders, Om Traders, Capital India & S.M enterprises — all controlled by Shri Ritesh Agarwal. In all these firms, Shri Ritesh Aggarwal had availed and passed on ITC of Rs. 376 crore by means of billing without goods. Shri Ritesh Aggarwal was sanctioned refund of Rs. 37.13 crore from the department.

In addition, Shri Ritesh Aggarwal was found to be a habitual offender. In an earlier case also Show Cause Notice for demand of Rs 26.53 crore was issued to him for similar modus operandi of operating fake firm, M/s SS & Co. (GSTIN 06DJUPD5067G2ZW) and availing and passing on fake ITC.

Further, Shri Ritesh Aggarwal, who also adopts the alias of Ravi Gupta, was found to be accused in the Show Cause notice dated 01.03.2019 issued by the DGRI wherein fraudulent drawback was availed on imported areca nuts by forging the Certificate of Origins.

The investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement recorded of many suppliers of these firms, it was ascertained that Shri Ritesh Aggarwal is a key person in orchestrating this racket of making fake/non- existent/dummy firms and wrongly availment and passing on on ITC of Rs. 376 crore. Accordingly, Shri Ritesh Aggarwal was arrested on 09.02.2021 and produced before Duty MM, Patiala House Court Delhi, who ordered judicial custody.

Further investigations in the matter are under progress.

GST : CA Arrested for Fraudulently Passing on Fake ITC of Rs. 14.30 Crore

GST : CA Arrested for Fraudulently Passing on Fake ITC of Rs. 14.30 Crore

In the ongoing campaign against fake/bogus invoices and resultant availment of inadmissible ITC, officers of Central Goods and Service Tax (CGST) Commissionerate, Delhi (East) have detected a case of issue of fake bills of Rs. 79.5 crore (approx). The syndicate was being operated by Sh. Nitin Jain, C.A by floating three firms i.e M/s Anshika Metals, M/s N.J Trading Co. and M/s A.J Enterprises using the identity of his family members, with the intent of passing of inadmissible ITC. Sh. Nitin Jain, C.A through these firms has passed on fake ITC of Rs. 14.30 crore. All the e-way bills generated to transport the goods were also found fictitious. Sh. Nitin Jain, C.A who was absconding since 16.12.2020 finally appeared before the investigating officers on 13.01.2021 and in his statement accepted that he has floated three fictitious firms using identity of his father Sh. Naresh Chand Jain and his wife Mrs. Diksha Jain for the purpose of availing and passing of fake ITC.

Significantly, in two earlier cases of fake billing detected by the Delhi East Commissionerate in which Sh. Sachin Mittal and Sh. Dinesh Jain were found involved in issue of bogus invoices and had passed fake ITC of Rs. 12 crore and Rs. 13.98 crore respectively through their firms had in their statements also revealed the name of Sh. Nitin Jain, C.A and stated that he had arranged/provided them fake bills/invoices of different firms on commission basis.

Sh. Nitin Jain by using fake entities on the identity of his family members has knowingly committed offences under Section 132(1)(b) and 132(1)(c) of the CGST Act,2017 as amended vide Section -127 of the Finance Act’2020, which are cognisable and non-bailable offences as per the provisions of Section 132(5) and punishable under clause (i) of the sub section (1) of Section 132 of the Act ibid.

Sh. Nitin Jain, C.A has been arrested under Section 69(1) of the CGST Act’2017 and produced before the Duty Magistrate. He has been remanded in judicial custody of 14 days upto 27.01.2021 by the Duty Magistrate. Further investigation in this case is under progress.

The consolidated amount of detection under fake invoices for the current year is Rs. 3684.46 crore and the total number of arrests for the Zone is 18.

Tag: GST FRAUD