The Directorate General of GST Intelligence (DGGI), Bhubaneswar zonal unit has arrested a Maharashtra native for his alleged involvement in a fraud amounting to over a whopping Rs 325 crore.
The accused, Nilesh Yogesh Jagiwala, was apprehended from Mumbai on Wednesday. Issuing a statement in this regard on Friday, GST Intelligence said Jagiwala was the mastermind behind a sprawling network that created and operated more than 105 shell companies to generate fraudulent input tax credit (ITC).
Initial investigation by the GST department revealed that the network had registered multiple firms using forged identity documents, appointed dummy directors and carried out the illegal operations entirely through the virtual infrastructure to create an impression of legitimate commercial activity.
The fraud involved purchase of dormant companies with active goods and services tax identification numbers (GSTINs), DIR-12 filings to replace actual directors with dummy directors, mass generation of fake invoices, staged banking transactions and cash reversals.
Elaborating on their modus operandi, a GST official said members of the network approached the owners of the companies whose business had failed, and gave them meagre commissions to obtain their GSTINs using which they committed the fraud.
During searches at multiple locations in Mumbai and Pune, the officials seized several incriminating materials, including fake seals of various companies, several mobile phones and SIM cards linked to GST registrations, digital records, bank account details and transaction logs.
On October 17, the DGGI had arrested a woman from Pune, who was also part of the network and a close associate of Jagiwala.
The GST officials have advised owners of dormant firms not to fall into the traps of such scamsters. They further urged such company owners to surrender their registration free of cost to the department in case their businesses fail or they do not want to continue the operations anymore.