CA student floats fake firms to avail tax credit of Rs 50.24cr, held

During questioning, Khatri is said to have admitted that he used identities of villagers and labourers from Ahmedabad and Dahod, promising them monthly payment in cash

The Vadodara Central Goods and Sales Tax -II (CGST-II) arrested a final year student of Chartered Accountancy for allegedly floating over 115 fake firms to avail Input Tax Credit of Rs 50.24 crore. A release from the CGST-II said the accused, Prince Manish Kumar Khatri, a resident of Ahmedabad, used fake identity cards of villagers from tribal district of Dahod to float his fake companies.

As per a report in The Indian Express, the officers of CGST, Vadodara-lI Commissionerate of Vadodara Zone, after the intensive data mining and data analysis of the suspicious taxpayers, particularly relating to the e-way bill data, GSTR-3B data and GSTR-1 data, detected Khatri, who had floated more than 115 fake firms by using the IDs of villagers of Dahod and other areas located in Ahmedabad.

"The kingpin, who hails from Ahmedabad, by floating these large number of fake firms, had issued fake invoices to generate fake Input Tax Credit amounting to Rs 50.24 crores. This fake illegal credit was eventually passed on in chain to other fake identities by issuing fake invoices and without actual supply of goods and services," the release said.

During questioning, Khatri is said to have admitted that he used identities of villagers and labourers from Ahmedabad and Dahod, promising them monthly payment in cash, officials said.

The CGST officers arrested Khatri under Section 69 of the CGST Act, 2017 on October 16, 2020, as he had committed an offence under Section 132(1)(6) of the CGST Act, 2017. Section 132 (1)O0) of CGST Act, 2017 which prescribes punishment up to five years imprisonment with fine for the said alleged offence. He was produced before the Chief Judicial Magistrate, Vadodara, who remanded him in judicial custody.

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