DGGI arrests 2 from Ludhiana in Rs 314 cr fake billing case

The Directorate General of Goods and Services Tax Intelligence (DGGI) arrested two men for wrongfully availing ineligible input tax credit (ITC) of Rs 56.52 crore through bogus billings to the tune of Rs 314 crore without any receipt of goods.

The suspects include the father-son duo of Pawan Kumar Goyal and Peeyush Goyal of M/s Sona Castings Pvt Ltd in Mandi Gobindgarh, which is engaged in manufacturing of MS Billets, Hot Rolled (HR) Coils and ERW Pipes and Tubes.

They were also engaged in the clandestine clearance of goods without invoices, causing losses to the government revenue.

During the search operation, digital devices like CPU, mobiles and other incriminating documents like hand-written kacha (without bill) slips and diaries were seized from the residential and official premises of the suspects.

As “masterminds”, they have availed and utilised fraudulent ITC of ?56.52 crore without underlying supply of goods through fake billing of ?314.02 crore in violation of the provisions of CGST Act, 2017. During the search, evidence was also found about clandestine removal of finished items having tax implication of Rs 80 lakh. There was also a stock shortage involving tax liability of Rs 85 lakh.

The arrests are latest in a series of actions by DGGI Ludhiana to curb the practice of tax evasion through fake billing and clandestine removal of goods without invoices. In the last two weeks, the DGGI Ludhiana has arrested five individuals in multiples cases of fraudulent ITC passing and availing benefits to the tune of Rs 200 crore in fake billing scams worth Rs 1,250 crore.

The DGGI Ludhiana is identifying more entities that are involved in the fraudulent activity of bogus billing and clandestinely removal of goods without paying of taxes.