Officers of Anti-Evasion, Central GST Delhi East Commissionerate have unravelled a major operation of Circular Trading, involving use of fake invoices to claim fraudulent refunds of Input Tax Credit.

Asif Khan, Rajeev Chhatwal and Arjun Sharma, operating a total of 17 fake firms, procured invoices without actual supply of goods and availed as well as passed on ITC fraudulently, to the tune of ₹436 crore, an official release said.

The fraudulently availed ITC was used by them to file refund claims to the tune of ₹11.55 crore under Inverted Duty Structure, the release said. The said refund claims were also filed by fake firms floated by the accused persons, it added.

The accused persons are related to each other by marriage and were evading investigation for the last one month. During investigation it came to light that a major Hawala operation was being run by the accused persons in connivance with certain bank employees (under investigation).

These 17 firms existed only on paper and had been floated for passing on ITC by generation of fake invoices. Companies on both sides of the transactions, recipient as well as supplier, were found to be non-existent.

Some businessmen are also under investigation for taking entries from the accused persons for the purpose of money laundering. It was further learnt that Asif Khan was running a similar operation during the erstwhile VAT regime. It came to light that the trio was planning to spread its operations to other States at the time they were apprehended.

Asif Khan, Rajeev Chhatwal and Arjun Sharma were arrested on March 1 under Section 69(1) of the CGST Act, 2017 and remanded to judicial custody till March 13 by the Chief Metropolitan Magistrate in Patiala House Court.

Further investigation in the matter is under progress, the release said.

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