Rs 10,000 crore GST fraud: 3,000 shell cos created on fake details

New Delhi, June 10, 2023

A multi-agency probe launched by the Centre to investigate Noida police's claim of having busted a racket of GST fraud to the tune of Rs 10,000 crore has revealed at least 3,000 shell companies were created on fake Aadhaar and PAN details.

On Thursday, the Directorate General of GST Intelligence (DGGI) arrested one Sanjay Dhingra, the promoter of Good Health Industries Pvt Ltd, Rajouri Garden, Delhi, which is engaged in manufacturing of 'Dairy Best' brand of desi ghee having manufacturing units at Mewat in Haryana and Saharanpur in UP.

According to sources, Dhingra told DGGI during his questioning that the syndicate had managed to register at least 3,000 companies, of which 1,000 were actively engaged in illegally raising e-way bills and claiming input tax credit worth hundreds of crores. So far, the agency has tracked tax evasion of more than Rs 700 crore by these entities.

The Centre has involved other intelligence agencies in tracking the members of the syndicate that has a footprint in several states and were able to register shell companies.

Special teams have been constituted by the DGGI and an analysis of records revealed these operational 1,000 shell companies have evaded Goods and Services Tax (GST) of more than Rs 700 crore. The end users of these fake GST were identified on an all India basis after a search and seizure operation.

A unit of DGGI's Ghaziabad is probing Dhingra's manufacturing units at Mewat and Saharanpur for alleged involvement in evasion of GST of more than Rs 63 crore, sources said. Dhingra had been arrested in the past, too, for alleged GST fraud and is under investigation by other central agencies in bank fraud cases.

Preliminary investigation revealed the modus operandi of the syndicate was creating shell entities on fake documents and appointing dummy directors to shield the mastermind.

[The Times of India]