Mumbai: Businessman from Surat held in Rs 41 crore tax fraud case

MUMBAI: The Directorate General of Goods and Services (DGGS) on Saturday arrested a Surat-based businessman who allegedly floated several fictitious companies and availed Input Tax Credit (ITC) to the tune of Rs 41 crore.
Tejas Desai, director of Vastram Creations, was arrested under the Central Goods and Services Tax Act, 2017. He has been remanded to custody for 14 days, said an official.
The DGGS came across information that Desai, who has around 15 export companies, was availing IGST refund from the government by submitting bogus/fake invoices.
On December 12, the DGGS, Mumbai unit, conducted raids on his office and seized documents. Official said the accused had created a complex web using multiple layers of transactions through custom house agents, freight forwarders, forex dealers and commission agents.
Officials said Desai used to purchase garments and footwear from the grey market without invoices and without paying GST on export. He later purchased ITC at a commission of 3% to 4 % of the value of invoices. During interrogation, Desai not only admitted to the fraud, but also said he had destroyed records to evade scrutiny.