DGGI busts inter-state nexus involving three companies

In an investigation by the Directorate General of GST Intelligence (DGGI), Ludhiana, three business entities, Aar Dee Enterprises, Aashi Steel Industries and Abhi Alloys, all based in Mandi Gobindgarh, were found to have been involved in illegal sales of Rs 87.91 crore, which had led to GST evasion of Rs 13.41 crore. The firms were involved in trading of iron and steel articles.

The case has been unearthed due to the intra-organisational and inter-regional synergy between two offices, DGGI, Lucknow, in UP and DGGI, Ludhiana, in Punjab.

Two individuals namely, Raman Kumar Chaurasia and Devinder Singh of Mandi Gobindgarh and Khanna, respectively, in Punjab used to procure iron and steel articles fraudulently through fake billing from Deepanshu Srivastava and one of his accomplices, Mohit Kumar, based in Lucknow, Uttar Pradesh. The Lucknow-based individuals, through 37 of their fraudulent business entities, had passed on fake Input Tax Credit (ITC) to the Mandi Gobindgarh-based business entities. On investigating the Punjab based entities, it was learnt that they had taken fraudulent ITC through fake billing from 78 business entities involving an illegal sales of Rs 87.91 crore, which led to the GST evasion of Rs 13.41 crore.

During investigation by the DGGI, Ludhiana, many pieces of incriminating evidence were found and seized. It was further coorborated in voluntary statements made and admitted by these individuals.

On May 15, the DGGI, Ludhiana, placed under arrest Raman Kumar Chaurasia and Devinder Singh for their acts leading to the GST evasion of Rs 13.41 crore. They have been sent to judicial custody.

The DGGI, Ludhiana, has made multiple strides in its bid to weed-out the menace of fake billing and fraudulent availment, utilisation and passing of fake ITC.

Fake billing and fraudulent ITC claims pose a serious threat to the integrity of the indirect taxation system, under the GST regime.

Moreover, fake billing significantly impacts government revenue, reducing funds available for public welfare, infrastructure and social development. It distorts the economy, disrupts fair market competition and can even lead to inflationary pressures when cascading effects trickle down the supply chain.