On-run city bizman holidaying in Shimla, held

GST REFUND FRAUD
Ludhiana: When the tax department sleuths were searching for the city businessman, who is a co-accused in the alleged GST refund fraud of Rs 61 crore, he was holidaying at a five-star hotel in Shimla. But on Wednesday, he eventually ran out of luck and was tracked down by the headquarters of the Directorate General of GST Intelligence (DGGI).
A team of the department arrested him from the hotel room and also seized his mobile phones as he refused to provide passwords. He was produced before a court and sent to judicial custody at Tihar Jail in New Delhi for 14 days.
In March, the DGGI had raided the businessman’s premises, but he was not arrested due to a death in the family. He is accused of indulging in circular trading by creating fake companies and supplying bogus bills to four Delhi firms, based upon which these establishments got GST refunds up to Rs 61 crore fraudulently.
The DGGI, in its application in the court, said, “The investigations are being hampered because of the hostile attitude of the accused, who is a habitual offender. He is causing obstruction to the probe, may also destroy the vital evidence and flee the country. Thus, the competent authority on October 6, 2020, had approved his arrest under Section 69 of the CGST Act, 2019.”
In an official statement, the DGGI said, “An intelligence was developed by the officers of DGGI that few exporter companies were engaged in fraudulent availment of input tax credit (ITC) on the invoices of non-existing and fictitious firms or such firms which apparently do not have any purchases themselves. The ITC so availed was utilized to pay IGST on the export goods, which was thereafter claimed as cash refund. Thus, the government exchequer was put at double loss… DGGI headquarters searched the exporter companies and residence of their owner as well as premises of various supplier companies on March 6, 2020. These supplier companies were found to have supplied only bills to these exporters, without supply of goods. The exporters had taken ITC on these fake bills and had taken refund as the goods were shown to be exported. The controllers of the export firms were arrested on March 6 by the DGGI. However, the Ludhiana-based owner of the supplier firms was on the run and untraceable. He was not appearing for investigations even after various summons. He appears to be a habitual economic offender and numerous cases have been made against him and his companies. Earlier, he had also been put under preventive detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) in a case of commercial fraud investigated by the DRI (sic).”