Rs 52 cr input tax credit fraud unravelled, one held for 'trading of fake invoices'

New Delhi [India], October 25 : The Directorate General of GST Intelligence (DGGI), Pune Zonal unit arrested one person accused of trading fake invoices in connection with Rs 52 crores input tax credit fraud.
Sources in the Finance Ministry told ANI that the accused, Tusshar Ashok Munoat, was into trading of fake invoices and used to generate them on a commission basis for ineligible input tax credit (ITC) availment and passing it on to others fraudulently.
They also expressed dismay at those who lobby to oppose the "arrest" as an essential preventive measure in GST (Goods and Services Tax) to curb unbridled dishonest activities by such unscrupulous elements and are challenging the provision of arrest in GST in various courts.
The sources said that Munaot has admitted during the investigation that he was into "trading of fake invoices to earn commission benefit" and owns M/s Rutu Enterprise and a few other companies such as M/s Reise Enterprises, M/s Namo Enterprises and M/s Patil Contractor.
So far, he has issued bogus/fake invoices for ITC availment of worth Rs 32.56 lakh and fake invoices for ITC passed worth Rs19.63 lakh. Total ITC involved is about Rs 52.19 crore. Further investigations are under progress.
The government has started the use of Aadhaar in GST registration to check this menace of bogus/fake firms and thereby put a curb on fraudulent availment and passing on of ITC, as per the sources. Also, serious deliberations are on in the Department of Revenue of putting such dubious firms under risk category and to block their refunds, besides other appropriate legal actions, as necessary.
They said that during the course of investigations against M/s Finnova Infotech and M/s Softtech Ltd on availment of ineligible ITC through fake invoices, it was noticed in data analytics exercise in November last year that M/s Rutu Enterprise and other companies such as M/s Reise Enterprises, M/s Namo Enterprises and M/s Patil Contractor, had issued fake invoices without supply of goods/services.
Accordingly, investigations against these were launched in November 2019 by way of search at their registered premises. On investigation it was found that none of these firms were operating from their registered premises and all these firms were controlled by Munoat. The details of ITC involved in the transactions pertained to the supply of construction service, works contract service, etc.
Sources said that the statement of Munoat was recorded wherein he admitted that he was into trading of fake invoices to earn commission benefit and promised to submit the relevant documents and extend co-operation in the investigation. Later, summons were issued to Munoat and other related persons to appear before GST authorities on many dates.
After a long tracing, the accused was arrested on October 21, 2020, from a remote village in Osmanabad district of Maharashtra.
He was produced before the Magistrate who rejected his bail application and remanded him to judicial custody till November 2, 2020.
M/s Rutu Enterprises is a Pune-based firm which had four GSTIN numbers, one each for Maharashtra, Madhya Pradesh, Himachal Pradesh, and Uttar Pradesh; and was shown engaged in civil work such as interior work, construction of buildings/roads/bridges, pipeline laying work and electric work etc.