Rajkot Businessman Arrested for ₹186 Crore GST Scam
The Goods and Services Tax (GST) department recently arrested Pragnesh Kantaria, a businessman from Rajkot, for his alleged involvement in a ₹186 crore GST fraud. This action comes after authorities conducted raids on Fortune Copper Industries, Infinity Exim, and 14 other entities connected to him.
Details of the Scam
Modus Operandi:
Kantaria allegedly fabricated fake purchase bills for copper to falsely claim input tax credits (ITC) without engaging in actual transactions.
Fraudulent ITC Claim:
- Fake transactions worth ₹186 crore were created.
- He fraudulently claimed ₹34 crore as ITC, resulting in a significant loss to the government exchequer.
Affected Regions:
The scam impacted copper trading in Rajkot, Surat, Bharuch, Vapi, Junagadh, and Bhavnagar.
Earlier Arrest and Developments
Authorities had already arrested Sandip Varani, a partner at Fortune Copper Industries, on November 13 for a ₹19.46 crore GST fraud related to this case. Moreover, investigations into M/s Infinity Exim uncovered Kantaria’s fraudulent practices, including the illegal ITC claims.
Legal Provisions Violated
These activities violate Section 132(1)(a) of the GST Act, which specifically targets offenses such as issuing fake invoices and fraudulently claiming tax credits.
Further Investigation
The scale of the scam may surpass ₹186 crore as the investigation progresses. Officials are currently scrutinizing additional financial records to identify accomplices and uncover further fraudulent claims.
Conclusion
This case underscores the importance of implementing stringent enforcement measures to prevent tax fraud. By enhancing monitoring mechanisms, authorities can better protect the government’s revenue and deter similar crimes in the future.
