THE DIRECTORATE General of Goods and Services Tax Intelligence (DGGSTI) in Mumbai has arrested the directors of two city-based firms in connection with an alleged service tax and GST fraud of Rs 173 crore, The Indian Express has learnt.
Sources said that the agency has alleged that Amit Upadhyaya of Horizon Outsource Solutions Private Limited has wrongly taken GST credit of Rs 80 crore from the government by showing fake invoices of software services received from Asad Anwar Sayed of Best Computer Solutions Private Limited since July 2017. The probe has also allegedly found that Horizon Outsource had issued bogus invoices showing GST of Rs 47 crore to its clients.
“The agency has found that Horizon Outsource has issued and received fake invoices of about Rs 127 crore. While the case is still under investigation, Upadhyay may have also used bogus invoices to increase the turnover of his company and in turn increase his borrowing capacity from the banks,” said a source.
The DGGSTI also suspects that the company may have been involved in laundering money, the source added. According to sources, the company has allegedly shown a turnover of Rs 400 crore for financial year 2016-17. Besides, the DGGSTI has allegedly found that under the Finance Act, Horizon Outsource has collected service tax of Rs 47 crore between April 2016 and June 2017 but not deposited the money with the government.
Horizon Outsource was set up in March 2011 with an authorised share capital and paid up capital of Rs 10 crore each. The firm, according to records, is involved in the business of manpower outsourcing, accounting, book keeping, auditing, tax consultancy, market research and public opinion polling among other things.
Upadhyay is also on the board of six other firms, including Best Stock Solutions Research and Advisory LLP, Gyaneshwar Trading and Sales Private Limited and Arkdeep Share Traders Consultancy Private Limited. Best Computer was set up in March 2012 and has an authorised capital and paid up capital of Rs 5 lakh and Rs 1 lakh, respectively. The firm is involved in data processing. Upadhyay and Sayed have been remanded to judicial custody till June 2.