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Tuesday, October 20, 2020

Hyderabad: DGGI arrests city Infra firm director in ITC fraud

According to officials, searches were carried out across locations in Pune, Mumbai, Chennai, Kurnool, and Hyderabad.

By: Express Web Desk | Hyderabad | Updated: September 24, 2020 9:10:30 am
Hyderabad news, Hyderabad fake GST invoice, fake ITC invoice, fake GST invoice racket busted, GST, GST collections, GST fraud, Hyderabad police, fake GST invoice arrestThe accused was remanded in judicial custody till October 6.(Representational)

The officials of the Directorate General of GST Intelligence (DGGI), Hyderabad Wednesday arrested the director of a private limited company for fraudulently availing and utilising input tax credit (ITC) by issuing fake invoices without any supply of goods or services. The accused was remanded in judicial custody till October 6.

The Hyderabad headquartered infrastructure company, Smartgen Infra, has its operations ranging from commercial real estate, IT/ITES services, the supply of coal, PCCP and BWC Pipes, execution of drinking water pipeline projects, and to supply and installation of electro-mechanical works.

According to a press note from the joint director of DGGI Hyderabad Zonal unit, Kiran Reddy T, the company in question has issued fake invoices worth Rs 139.93 crore to fraudulently avail and utilise ITC to the tune of Rs 19.7 crore and have also availed and utilised ITC to an extent of Rs 14.9 crore on invoices worth Rs 98.48 crore without receiving any goods or services in violation of the provisions of the Central Goods and Services Tax Act, 2017.

According to officials, searches were carried out across locations in Pune, Mumbai, Chennai, Kurnool, and Hyderabad. On September 21, DGGI officials of the Hyderabad Zonal Unit carried out searches in four different premises. They recovered documents, according to the note, including fake invoices suggesting supply and receipt of goods without any provision for a godown or a warehouse. Several key managerial employees of the company were questioned and their voluntary depositions have been recorded.

“The company has also apparently indulged in circuitous trading of invoices involving entities across India to boost the turnover in order to enhance their LC (Letter of Credit) and OD (Overdraft) limits and boost turnover to qualify as the bidder for major infrastructure projects. The company also utilised such proceeds to purchase luxury cars,” said the press note.

Two bank accounts related to the company were identified and provisionally attached to safeguard the government revenue. Pending investigation and efforts are underway to identify and recover tax fraudulently evaded by the ultimate beneficiaries, it said. Further investigation is on to examine the company’s transactions in other states as well as with other major infrastructure firms.

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