The Directorate General of Goods and Services Tax Intelligence (DGGI) in Mumbai has arrested Sunil Gutte, son of sugar baron Ratnakar Gutte, for fraudulently availing input tax credit (ITC) of Rs 520 crore from the government by using fake invoices of Rs 3,000 crore without any actual supply of goods or services.
The agency said it has unearthed “a large cartel of companies” in New Delhi, Hyderabad, Ludhiana, Gurugram, Meerut, Ahmedabad and Kolkata, which have indulged and participated in this fraud along with Sunil Hitech Engineers Limited.
“These bogus transactions were used not just for generating bogus input tax credit, but also for artificially inflating the turnover of the company so as to gain higher credit limit and bank loans, and also to siphon funds,” said an official familiar with the development.
The DGGI has alleged that Sunil Hitech Engineers is one of the key operators involved in the fake ITC cartels. Apart from Sunil, the agency has also arrested Vijendra Vijayraj Ranka, director of Shree Oshiya Ferro Alloy Private Limited.
According to DGGI, Shree Oshiya Ferro Alloy has “fraudulently issued as well as received bogus invoices” of Rs 1,371 crore, involving ITC of Rs 209 crore. Shree Oshiya Ferro Alloy has made substantial supplies to Sunil Hitech, said official sources.
Both Sunil and Ranka have been booked under Section 69 (1) of the Central Goods and Services Act, 2017, for issuing bogus invoices for wrongfully availing ITC without any supply of goods or services. They have been remanded to judicial custody by a local court.
In 2019, Sunil Hitech was sent for liquidation by the National Company Law Tribunal (NCLT). It owes about Rs 2,300 crore to over a thousand creditors.
Incidentally, in 2018, the DGGI had arrested Sunil’s filmmaker brother Vijay Gutte for alleged Goods and Services Tax (GST) fraud of at least Rs 34 crore. Vijay Gutte is the director of The Accidental Prime Minister, based on Sanjay Baru’s book of the same name.
Ratnakar Gutte and his firm Gangakhed Sugar and Energy Private Limited (GSEPL) have come under the scanner of the Enforcement Directorate (ED) for violating Prevention of Money Laundering Act (PMLA) by allegedly defrauding Andhra bank, UCO Bank, United Bank of India, Bank of India and Syndicate Bank of at least Rs 328 crore.
In 2014, Ratnakar Gutte had contested the Assembly polls from Gangakhed in Parbhani as a candidate of the BJP-led alliance but lost.
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