In a major action against a GST scam, the Madhya Pradesh Economic Offences Wing (EOW) has busted a gang involved in a massive Rs 34 crore input tax credit fraud. The gang allegedly created fake firms using personal documents obtained under the pretext of processing loans.
The mastermind, identified as Vinod Kumar Sahay, was arrested from Ranchi, Jharkhand’s capital, and presented before the Jabalpur district court on Friday. He has been sent to police remand until July 2.
Fraud committed using loan bait to gather documents
The accused allegedly lured individuals from Indore, Bhopal, and Jabalpur by claiming that GST registration was required to secure a loan. Under this pretext, he collected critical documents, including Aadhaar cards, PAN cards, photographs, bank statements, land records, electricity bills, and more.
Using these, he registered fake firms in their names, without their knowledge. Paper transactions were shown for purchases and sales, allowing fraudulent claims of input tax credit (ITC) amounting to over Rs 33.8 crore without any actual movement of goods or services.
Complaint by Jabalpur resident led to probe
The case came to light after Pratap Singh Lodhi, a resident of Jabalpur, filed a complaint. A preliminary inquiry by the Assistant Commissioners of Commercial Tax Department, Vaishnavi Patel and Jyotsna Thakur, revealed strong indications of criminal conspiracy and GST fraud.
Further investigation found that during 2019–2020, the accused—posing under a false identity as NK Khare—approached several individuals including Pratap Singh Lodhi, Deendayal Lodhi, Ravikant Singh, and Nilesh Kumar Patel.
Fake firms registered across cities
The accused created the following fake entities:
- M/s Maa Narmada Traders – Registered on February 7, 2020 in the name of Pratap Singh Lodhi
- M/s Namami Traders – Registered on August 13, 2019 in the name of Deendayal Lodhi
- M/s Maa Rewa Traders – Registered on February 19, 2020 in the name of Ravikant Singh
- M/s Abhijeet Traders – Registered on February 26, 2020 in the name of Nilesh Kumar Patel
EOW’s site inspections revealed that no actual business activity was taking place at the registered addresses. These companies existed only on paper.
Bogus billing, ITC passed on to other businesses
Vinod Sahay showed crores worth of fake outward supplies under these firms. On the basis of fabricated invoices, he facilitated bogus ITC benefits to other businesses, essentially helping them evade taxes without any real exchange of goods or services.
The scam’s financial scale has been confirmed at Rs 33.80 crore, and the fraud was executed by misusing IDs, emails, passwords, and mobile numbers of victims. Sahay retained full control over the login credentials and bank accounts of these fake firms, enabling him to generate and circulate fake bills.
Ongoing investigation and further arrests likely
Officials said this could be part of a larger inter-state network, and further arrests are likely. Authorities are now working to trace the businesses that illegally claimed ITC through these fake invoices. The case underlines the urgent need for stronger safeguards in GST registration and ITC claims.
Source from: https://www.bhaskarenglish.in/local/mp/news/34-crore-gst-scam-uncovered-in-mp-135327670.html
