The Vadodara Central Goods and Sales Tax -II (CGST-II) has arrested a final year student of Chartered Accountancy for allegedly floating over 115 fake firms to avail Input Tax Credit of Rs 50.24 crore. A release from the CGST-II said that the accused, Prince Manish Kumar Khatri, a resident of Ahmedabad, used fake identity cards of villagers from tribal district of Dahod to float his fake companies.
The officers of CGST, Vadodara-lI Commissionerate of Vadodara Zone, after the intensive data mining and data analysis of the suspicious taxpayers, particularly relating to the e-way bill data, GSTR-3B data and GSTR-1 data, detected Khatri, who had floated more than 115 fake firms by using the IDs of villagers of Dahod and other areas located in Ahmedabad.
25 Year old CA student held by CGST Vadodara for Rs50 crore GST fraud.
Prince Khatri, a CA student from Ahmedabad created 115 fake companies. Khatri used fake identities of villagers from Dahod & Ahmedabad to create fake companies.
— Our Vadodara (@ourvadodara) October 22, 2020
The kingpin, who hails from Ahmedabad, by floating these large numbers of fake firms, had issued fake invoices to generate fake Input Tax Credit amounting to Rs.50.24 Crores. This fake illegal credit was eventually passed on in chains to other fake identities by issuing fake invoices and without actual supply of goods and services.
The CGST officers arrested Mr Khatri under Section 69 of the CGST Act, 2017 on 16th October, 2020, as he had committed an offence under Section 132(1)(b) of the CGST Act, 2017.
It may be noted here that Section 132 of CGST Act, 2017 prescribes that such person could be sentenced to jail upto 5 years with fine for the said alleged offence.
After the arrest, the said CA student was examined at SSG Hospital, Vadodara and then produced before the Chief Judicial Magistrate, Vadodara, who has remanded him for judicial custody. Further investigations are stated to be in progress.