On Tuesday, the Crime Branch of Ahmedabad Police arrested 20 individuals, including a journalist from The Hindu, in connection with a significant Goods and Services Tax ( GST ) fraud case. The Enforcement Department will investigate the matter as per the latest update.
According to the ED, the matter involved a large conspiracy and thus, decided to investigate the money laundering.
The investigation revealed a network of over 200 fake companies, fake bills, and forged documents designed to defraud the government. The journalist was arrested after being questioned about the alleged scam, which aimed to illegally claim input tax credits. Although his name was not directly mentioned in the official complaint, a company linked to a family member was included.
According to the Deputy Commissioner of Police (Crime), the Central GST had identified suspicious transactions involving companies registered under this journalist’s wife and father’s names using forged documents.
The police began investigating after receiving a complaint from the Central GST regarding these bogus firms, which were reportedly set up to defraud the government by claiming false input tax credits.
The Directorate General of GST Intelligence (DGGI) in Ahmedabad conducted raids across several locations in Gujarat, including Ahmedabad, Junagadh, Surat, Kheda, and Bhavnagar. Police noted that there appears to be a well-organised effort involving over 200 fraudulent companies aimed at stealing tax revenue through bogus input tax credits. The FIR lists several companies involved in this scheme, such as Dhruvi Enterprise, Om Construction, and Arham Steel.
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Suresh Nambath, the Editor of The Hindu, confirmed the Journalists arrest on social media, stating they were not aware of the specifics of the case but emphasising that it was unrelated to his reporting. He expressed hope for a fair and swift investigation.
The investigation revealed that Dhruvi Enterprise allegedly obtained GST registration based on a suspicious rent agreement dated February 13, 2023, which turned out to be forged. Upon examining the validity of the document, police found that the company did not exist at its registered address.
The same tax identification number was later used to create six other firms, all sharing common email addresses and phone numbers, indicating a coordinated effort to engage in fraudulent tax activities.
In addition, the DGGI discovered that Dhruvi Enterprise was involved in transferring input tax credits to several other companies, which were also found to have suspicious connections to fraudulent activities. It was reported that these companies had claimed more tax credits than they were legally entitled to, indicating a broader scheme to exploit the tax system.
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As the investigation continues, authorities are looking into the intricate web of fraudulent firms and the possible connections between them.
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