The Directorate General of GST Intelligence (DGGI) is in the process of informing the Institute of Chartered Accountants of India (ICAI) to take necessary action for professional misconduct against three chartered accountants (CAs) who have been arrested for fake GST invoice frauds during the nationwide drive in the last few days.
Sources at the DGGI and the CGST Commissionerates said that on the eighth day of the drive, five more GST invoice fraudsters were arrested, taking the tally to 41 so far, which included a Chennai-based woman and three CAs - two from Hyderabad and one from Ludhiana.
DGGI sources informed that their office is in the process of raising the issue of professional misconduct with the ICAI, the apex body regulating the profession of chartered accountancy in India, with regard to its three CAs arrested in fake invoice racket, namely P.V.V. Satyanarayana, Ankur Garg and Bondalapati Srinivasa Rao.
Sources said that DGGI's Hyderabad zonal unit arrested Satyanarayana for his role in arranging fake invoices of fictitious firms for M/s CTIL Ltd causing availment of fraudulent input tax credit (ITC) of Rs 27.4 crore. It arrested Srinivasa Rao for arranging fake invoices of fictitious firms for M/s Kineta Global Ltd resulting in fraudulent ITC of Rs 10.37 crore.
CGST sources said that Ankur Garg was arrested by the CGST Commissionerate Ludhiana for his role in creating three fake firms, through which he indulged in fraudulent availment of ITC and fraudulent monetisation of ITC through refunds and bogus billing.
Using Business Intelligence and Fraud Analytics (BIFA) and analysis of data on the e-way bill portal, it could be established that these firms had a common set of ghost partners and bogus bills worth Rs 158 crore had been generated, involving fake ITC of more than Rs 21 crore and monetisation of fake ITC of more than Rs 5 crore through cash refund.
Sources said that DGGI, with total 41 arrests of GST fraudsters so far, has booked 577 cases against 2,221 identified entities by the eighth day of its drive against the fake GST invoice frauds. On Friday, searches and surveys were conducted in 20 cities -- Chennai, Ahmedabad, Hosur, Pune, Nagpur, Siliguri, Patna, Bhopal, Surat, Hyderabad, Raipur, Bhubaneshwar, Jaipur, Kanpur, Unnao, Meerut, Delhi, Bengaluru, Mumbai and Kolkata.
Sources said that two arrests were made on Friday in Gurugram while one each was made in Nagpur, Kolkata and Mumbai CGST zones. Searches were conducted at multiple premises in Kanpur, Unnao, Delhi and Meerut in relation to nine GSTIN registrations. Most of the addresses were found to be non-existent. The mastermind behind this racket, Amit Kumar, is absconding and efforts are being made to apprehend him.
At Hosur, during the course of premises verification, eight entities were found fictitious by the GST enforecement wing. From the inquiry conducted, it is found that the registrations were taken in the name of various persons by one auditor who was paying some amount to the identity lenders on monthly basis, sources said.