DGGI Mumbai busts major IGST refund racket, arrests one
Mumbai, December 16, 2019
The Directorate General of Goods and Services Tax Intelligence -Mumbai Zonal Unit (DGGI-MZU) has arrested one Shri Tejas Desai on Saturday (December 14, 2019) for fraudulently availing input tax credit of Rs. 41.15 crores without any supply of goods and services and only on the strength of bogus invoices. The arrested person had claimed Rs. 38.55 crores as IGST refund against exports.
In a press note issued by Seema Jere Bisht, Principal Additional Director General, DGGI –MZU, it has been stated that in the all India DGGI operation conducted on 11.09.19, three exporters were allotted to DGGI Mumbai for investigation. DGGI Mumbai searched their premises on 11.09.19 and found that they were bogus entities and created merely for the purpose of availing refund in a fraudulent manner. To unearth modus operandi and to nab the mastermind, DGGI Mumbai launched an operation, by following the money trail of the IGST refund obtained, several searches were conducted all over India on the premises of CHA, many companies, key persons , forex dealer, commission agent and freight forwarders and several statements were recorded. It was revealed that Shri Tejas Desai, a resident of Surat, who is also director/promotor/operator of 15 companies connived with several persons, for availment, utilization of Input Tax Credit of Rs. 41.15 crores and further availment of IGST refund of Rs. 38.55 crores on the strength of bogus/fake invoices. Shri Tejas Desai was arrested on Saturday and produced before Additional Chief Metropolitan Magistrate Court in Mumbai. He has been remanded to 14 days judicial custody by the Court. It was also gathered that he is a habitual offender and hadbeen arrested by Central Excise Department, Surat in 2005 for export rebate fraud and by DRI, Mumbai in 2007 for over valuation of exports.
The accused person created a complex web using multiple layers of transactions, through Custom House Agents, freight forwarders, forex dealers, individuals and commission agents and made exports from using different IECs and different bank accounts. It was a major racket that involved persons who helped in creation of dummy exporters, entities involved in movement of refund proceeds in multiple layers, forex dealers and companies and persons who finally encashed it in cash form and returned it to the mastermind. Shri Tejas Desai was actively controlling these transactions at all levels. Further investigation is under progress.