The Directorate General of GST Intelligence (DGGI) in Gurugram has arrested one Ritesh Aggarwal, a resident of Bahadurgarh in Haryana, on charges of passing and availing fake input tax credit (ITC).
The fraud was committed by operating dummy, fake and non-existent firms and encashing the unduly availed ITC through IGST refund mode by showing export of cigarettes.
A Finance Ministry release said that during the course of the investigation, it became apparent that Aggarwal, the proprietor of M/s SR Impex, was the de-facto controller of another firm, M/s SR International.
In the supply chain of these firms, six other dummy firms were found by the names of M/s Joles Trading Co, AS Traders, AR Traders, Om Traders, Capital India, and S.M Enterprises – all controlled by Agarwal.
In all these firms, Aggarwal had availed and passed on ITC of Rs 376 crore by means of billing without goods. Aggarwal was sanctioned refund of Rs 37.13 crore from the department.
In addition, Aggarwal was found to be a habitual offender. In an earlier case, a showcause notice was sent to him for availing and passing on fake ITC.
Further, the release said that Aggarwal, who also goes by the name of Ravi Gupta, was found to be an accused in the showcause notice dated March 1, 2019 issued by the DGRI wherein fraudulent drawback was availed on imported areca nuts by forging the certificate of origins.
The DGGI investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement of many suppliers of these firms, it was ascertained that Aggarwal is a key person in orchestrating this racket of making fake/non-existent/dummy firms and wrongly availing and passing on ITC of Rs 376 crore.
Accordingly, he was arrested on Wednesday and produced before the Patiala House Court, which sent him to judicial custody.