DGGI arrests man for fraudulently availing input tax credit of Rs 376 crore through 7 fake firms
Feb 10, 2021
New Delhi [India], February 10 : The Directorate General of Good and Services Tax Intelligence (DGGI) of Gurugram Zonal Unit (GZU), Haryana, has arrested Ritesh Aggarwal, a resident of Bahadurgarh, Haryana on charges of passing and availment of fake ITC while operating dummy, fake and non-existent firms and encashing this unduly availed input tax credit (ITC) through Integrated Goods and Services Tax (IGST) refund mode by showing export of cigarettes.
It became apparent from the investigation that Ritesh Aggarwal, the proprietor of M/s SR Impex was de-facto controller of another firm -- M/s SR International. In the supply chain of these firms were found to be six other dummy firms by the names of M/s Joles Trading Co, AS Traders, AR Traders, Om Traders, Capital India and S.M enterprises--all controlled by Ritesh Agarwal.
"In all these firms, Ritesh Aggarwal had availed and passed on Indian Tobacco Company (ITC) of Rs. 376 crore by means of billing without goods. Ritesh Aggarwal has sanctioned a refund of Rs. 37.13 crore from the department," stated a release by Ministry of Finance.
In addition, Ritesh Aggarwal was found to be a habitual offender. In an earlier case also 'show cause notice' for the demand of Rs 26.53 crore was issued to him for a similar modus operandi of operating a fake firm, M/s SS and Company and availing and passing on fake ITC.
Further, Ritesh Aggarwal, who also adopts the alias of Ravi Gupta, was found to be accused in the 'show cause notice' dated March 1, 2019 issued by the Directorate General of Revenue Intelligence (DGRI) wherein fraudulent drawback was availed on imported areca nuts by forging the 'certificate of origins'.
The investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement recorded of many suppliers of these firms, it was ascertained that Ritesh Aggarwal is a key person in orchestrating this racket of making fake/non-existent/dummy firms and wrongly availment and passing on on ITC of Rs. 376 crore.
Accordingly, Ritesh Aggarwal was arrested on February 9 and produced before Duty MM, Patiala House Court Delhi, who ordered judicial custody.
"Further investigations in the matter are under progress," added the release.
