In a significant crackdown, the Preventive Wing of the Central Goods and Services Tax (CGST) department uncovered GST evasion of approximately Rs 15 crore through fraudulent Input Tax Credit (ITC) claims. The discovery followed searches at four premises of M/S Pyrol Fuel Industries Private Limited, a bitumen company based in Indore.
The CGST and Central Excise Commissionerate, Indore, arrested the company's directors, Kartik Agrawal and Sheel Panchal, on Tuesday. Both were remanded to judicial custody for 10 days, until January 17.
Fraudulent ITC Claims Uncovered
Investigations revealed that the company's directors availed ITC from bogus, non-existent firms without receiving any actual goods, violating Section 16 of the CGST Act, 2017. The fraudulent ITC was then used to settle their outward tax liabilities.
Despite being issued multiple summons under Section 70 of the CGST Act, 2017, the accused failed to comply, prompting the department to intensify its probe. Searches conducted at the company's premises on Monday provided substantial evidence of the fraudulent activities.
Key Findings and Arrests
Based on the findings, Agrawal and Panchal were identified as the masterminds behind the tax evasion scheme. They were arrested under Section 69 of the CGST Act, 2017, and presented before the jurisdictional magistrate, who ordered their judicial custody.
Impact on Road Construction Sector
Sources revealed that M/S Pyrol Fuel Industries Private Limited primarily deals in bitumen, supplying it to road construction contractors. The investigation has also unearthed connections with prominent road construction contractors, whose involvement is under scrutiny.
Ongoing Investigation
The case highlights the CGST department's commitment to combating tax fraud. Officials confirmed that further investigations are underway to trace the full extent of the evasion and identify additional parties involved in the fraudulent network.
This development serves as a stern warning to businesses attempting to evade GST through illegal ITC claims, emphasizing strict enforcement of the CGST Act, 2017.
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