DGGI (HQs) arrests two in cases of fraudulent IGST refund claims

Two Arrests have been made by the Directorate General of GST Intelligence (HQs) in cases of fraudulent IGST refund claims here, today. As per the statement of the DGGI (HQs), the action was taken on receipt of an input from Allahabad Bank, Paschim Vihar, New Delhi that suspicious transactions were noticed in the accounts of 4 proprietorship firms (Monal Enterprises & Ors.) wherein large quantum of IGST refunds had been received by them immediately after their opening, without any prior business transaction history. Further, the refunds credited to these bank accounts were withdrawn/transferred in quick succession. Developing on the input, DGGI (HQs) verified that the addresses of these firms were either non-existent or the firms were not operating at the given addresses.

Further investigations revealed that the said 4 firms were in the names of benami individuals whose identification documents had been fraudulently obtained for the opening of these bank accounts and to obtain GST registrations. It was further revealed that the said 4 firms had no corresponding purchases against the exports claimed to have been made by them, nor had any export proceeds been realized. E-way bill data also revealed that corresponding movement of goods did not exist. Therefore, the said 4 firms had indulged in fraudulent   availment   of   IGST   refunds   on   the   basis   of   fake   invoices.

Investigations further revealed that Shri Ramesh Wadhera the mastermind who was controlled these fake firms and operated them with the connivance and active involvement of Shri Mukesh Kumar who fraudulently obtained identification documents used in this racket, from gullible employment seekers. It was further found that 10 more similar fake/fraudulent firms are being operated by the said two individuals. The total fraudulent IGST refund availed by these 14 firms amounts to ₹ 44 Crore, approximately. Searches were conducted at several premises over 13-15^th August, 2019. Shri Ramesh Wadhera and Shri Mukesh Kumar have been arrested under the provisions of Section 67 of the CGST Act, read with Section 20 of the IGST Act, 2017 for their active role in defrauding the Exchequer by claiming fraudulent IGST refunds. Shri Ramesh Wadhera is learnt to have several old cases of DRI/Customs against him.

Further investigations in the matter are under progress.