Assam: BIEO cracks down on GST fraud, masterminds behind fake invoices arrested

The Bureau of Investigation of Economic Offenses (BIEO) has apprehended a key suspect involved in a major GST fraud case. The arrest comes following two separate cases registered on June 20, 2023, based on the complaints filed by Assistant Commissioners of State Tax from Guwahati.

The investigation initiated by the Economic Intelligence Unit, Assam, focused on M/S Amit Traders and its alleged purchase of goods from M/S Shree Ram Enterprise, amounting to Rs. 32.35 Cr. M/S Shree Ram Enterprise wrongfully claimed Input Tax Credit (ITC) of Rs. 116 Cr., out of which Rs. 5.91 Cr. was passed on to M/S Amit Traders. It was discovered that M/S Amit Traders, registered at a non-existent address in Guwahati, had furnished fabricated documents during GST registration.
In a similar vein, M/S Deepak Enterprise, operating with a fake address, engaged in the purchase of goods from multiple suppliers, including M/S Shree Ram Enterprise, M/S Najmeen Traders, and M/S Manish Enterprise, with a total value of Rs. 100.27 Cr. One of the suppliers, M/S Shree Ram Enterprise, claimed ITC of Rs. 116 Cr., of which Rs. 16.80 Cr. was passed on to M/S Deepak Enterprise. The investigation revealed that M/S Deepak Enterprise had fraudulently registered the entity using fabricated documents.

Upon thorough investigation, it was established that both M/S Amit Traders and M/S Deepak Enterprise were non-existent dealers operating under fraudulent schemes. In a bid to trace the actual culprits, a specialized team comprising investigators and GST officials traveled to Arunachal Pradesh, where numerous business entities associated with the fraud were identified.

During the week-long operation, approximately 30 business premises were visited, including M/S B.T.T. Enterprise, M/S T.D. Enterprise, M/S Harang Enterprise, and M/S Arunachal Machinery & Power Tools, among others. Proprietors were interrogated to gather crucial details regarding their business connections with M/S Amit Traders and M/S Deepak Enterprise.

The examination of traders in Arunachal Pradesh led to the unearthing of the masterminds behind the sale of fake invoices—Vivek Gupta, proprietor of M/S North East Enterprise and M/S Sab Trading Agency, and Atish Kumar Tiwari, proprietor of M/S Arunachal Machinery & Power Tools. These individuals were instrumental in generating fraudulent invoices without the actual supply of goods, enabling them to claim Input Tax Credit and causing significant financial losses to the government.
On July 4, 2023, Atish Kumar Tiwari, one of the key perpetrators, was arrested in connection with BIEO PS Case No. 14/2023. He will also be arrested in BIEO PS Case No. 15/2023, pertaining to M/S Deepak Enterprise.