Surat: The Surat zonal unit of the Directorate General of GST Intelligence (DGGI) uncovered a fake input tax credit (ITC) racket being run through a network of firms in Ahmedabad and Surat, and arrested three persons on Friday. The preliminary investigation found fake billing of around Rs 450 crore where GST of Rs 80 crore was defrauded.Investigators found that RT Enterprise of Ahmedabad and Mangaldeep Inc and Computronix Infotech Pvt Ltd of Surat, were engaged in systematic issuing and circulation of bogus tax invoices without underlying supply of goods, solely to fraudulently avail of and pass on ITC, in violation of the CGST Act. Sources said Computronix Infotech is a market leader in IT infrastructure and computer hardware in Surat and has been operating for over two decades.After gathering documentary, digital and oral evidence, DGGI arrested Niral Shah, director of Computronix Infotech, Jyoti Kumar Choraria, proprietor of Mangaldeep Inc, and Babulal Sharma, proprietor of RT Enterprise. Investigators established that the alleged business operations were entirely fictitious. There was no physical movement of goods despite extensive invoicing and return filing that suggested high-value commercial activity.Funds moved through banking transactions across multiple accounts to give the appearance of genuine trade, after which funds were withdrawn and routed back in cash through angadias, confirming that the transactions were designed only to generate and monetize ITC fraudulently.It is suspected that the racket is part of a larger fraudulent ITC network and the amount of fraudulent ITC in this racket is likely to increase manyfold once the whole chain is investigated. Officials said ITC fraud is not a technical or procedural lapse but organized economic crime. By claiming tax credit without paying actual tax, fraudsters directly drain public revenue, weaken the GST chain and impose unfair competitive disadvantages on honest businesses that comply with the law.
