Vijay Ratnakar Gutte, director of the film, The Accidental Prime Minister, and son of sugar baron Ratnakar Gutte, has been arrested by the Directorate General of Goods and Services Tax Intelligence (DGGSTI) in Mumbai for alleged Goods and Services Tax (GST) fraud of at least Rs 34 crore, according to court documents seen by The Indian Express.
Vijay Gutte’s firm, VRG Digital Corp Pvt Ltd, has been accused of taking “fake invoices” involving GST of Rs 34 crore for animation and manpower services received from Horizon Outsource Solutions Pvt Ltd, a company that has come under the scanner of the government agency for GST fraud of over Rs 170 crore.
According to court documents, VRG Digital Corp has also wrongly claimed a cash refund of Rs 28 crore from the government against CENVAT (Central Value Added Tax) credit received for these fake invoices since July 2017.
Vijay Gutte has been booked under Section 132 (1)(c) of the CGST Act, which pertains to “wrongful availment” of input tax credit using bills and invoices that have been issued without any supply of goods or services.
His father, Ratnakar Gutte, contested the 2014 assembly polls from Gangakhed in Parbhani district as a candidate of the BJP-led alliance but lost.
Under the rules, in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised, or the amount of refund wrongly taken exceeds Rs 5 crore, the accused is liable to be fined and imprisoned for up to five years.
“The accused (Gutte) had not only availed of non-existent input tax credit (ITC) but further went ahead and fraudulently claimed refund of such ITC from the GST department on the strength of such fake/ bogus invoices to defraud state exchequer,” said the remand application filed in the court. The agency also said that Vijay Gutte was not cooperating with the investigation.
The Indian Express had first reported, on May 19, that directors of two Mumbai-based firms — Horizon Outsource Solutions Pvt Ltd and Best Computer Solutions Pvt Ltd — were arrested in connection with alleged service tax and GST fraud of Rs 173 crore.
The DGGSTI has found that Horizon Outsource had wrongly taken GST credit of Rs 80 crore from the government by showing fake invoices of software services received from Best Computer Solutions. The probe has also found that Horizon Outsource also issued bogus invoices showing GST of Rs 47 crore to its clients.
The agency’s probe has revealed that Gutte’s VRG Digital Corp was one of the top clients of Horizon Outsource Solutions and was shown as receiving services of about Rs 266 crore with a GST implication of Rs 40 crore, even as there was no actual supply of services, according to the remand application filed in court.
Vijay Gutte has so far produced three films, Emotional Attyachar, Time Bara Vait and Badmashiyaan. The Accidental Prime Minister is Gutte’s directorial debut. The film, based on Sanjaya Baru’s book, stars Anupam Kher as former Prime Minister Manmohan Singh and Akshaye Khanna as Singh’s media advisor, Baru. It is slated for release in December.
A Mumbai court has sent Vijay Gutte to judicial custody at Arthur Road jail till August 14.
His arrest comes at a time when some of his father’s firms are facing allegations of Rs 5,500 crore bank fraud. Leader of Opposition in the Legislative Council Dhananjay Munde, on July 17, alleged that Ratnakar Gutte’s eight firms had collectively defrauded various banks of over Rs 5,500 crore, and that the Maharashtra government was shying away from arresting him despite several offences registered against him. Munde alleged that Ratnakar Gutte floated 22 bogus companies and defrauded 26,000 farmers and several banks.
Munde has alleged that Ratnakar Gutte’s sugar unit used the ‘harvest and transport’ scheme to take loans in the names of over 600 farmers in 2015. The vehicles thus procured in the farmers’ names were used in the sugar factory but their loan repayment wasn’t done. Now the banks are nagging the farmers to repay the amounts, said Munde.