The Ahmedabad Crime Branch is investigating a large-scale alleged Central Goods and Services Tax (CGST) fraud in Gujarat, officials have said. A network of more than 220 benami companies allegedly passing and availing bogus Input Tax Credit (ITC) in a fraudulent manner are allegedly involved in the racket, officials added. The Economic Offences Wing (EOW) and the Special Operations Group (SOG), based on a complaint filed by the Directorate General of GST Intelligence (DGGI), have carried out raids at 14 premises spread across five districts of Gujarat, including Ahmedabad, Junagadh, Surat, Kheda and Bhavnagar. An FIR in the case was filed at the Detection of Crime Branch (DCB) police station in Ahmedabad on Monday. It was filed by a senior intelligence officer of the Directorate General of GST Intelligence (DGGI). More than 13 firms have been booked in the case. The alleged fraud is said to have been committed between February 1 and May 1 last year. The accused have been booked under Indian Penal Code (IPC) sections 420 (cheating), 467 (forgery of valuable securities), 468 (forgery for purpose of cheating), 471 (illegal use of forged document), 474 (possession of forged document and intent to use it), and 120b (party to a criminal conspiracy). The investigations began with a lead that a firm identified as M/s Dhruvi Enterprise, showing its address in Shapar, Rajkot, had allegedly obtained a GST registration fraudulently on the basis of forged documents like rent agreement dated February 13, 2023. The status of the firm showed ‘cancelled’ as on March 5, 2023 as per investigations. As per the complaint by the intelligence officer, “Analysis of data also suggested that the unit appeared to be indulging in receipt and transfer of bogus Input Tax Credit of GST to unscrupulous recipients by issuance of fake invoices without the supply of underlying goods.” On October 3, 2024, the complainant intimated the Ahmedabad police which, following verification, found the rent agreement to be forged and that no company by that name had existed at the registered place of business. As per the complaint, the analysis of data revealed that the PAN used for Dhruvi Enterprise, was used to create “a total of six firms”. This probe has set off a cascade of investigations into other firms linked to this one that had been created using forged documents. The FIR further states, “Now therefore, based on above information and investigation carried out by this office so far, it appears that prima facie, there is involvement of over 220 fraudulently created firms/entities working across the country in an organized manner to defraud the Government Exchequer by availing and passing of bogus Input Tax Credit.” It further said, “Usage of forged identities and documents for creation of such firms, with intent to orchestrate evasion of duty by adopting fraudulent means, has also been observed. Therefore, it appears to be a large group working towards a criminal conspiracy for causing financial loss to the nation to the tune of revenue which may run into crores of rupees, by the way of using such fake billing, forged documents and malafide misrepresentation of facts/documents which needs to be investigated in detail.” According to the statement from the Ahmedabad Crime Branch on Monday, further investigation in this case is underway.
