DGGI Gurugram arrests man for fraudulently availing ITC of Rs 376 crore through 7 fake firms

Last updated: 11 February 2021

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The Directorate General of GST Intelligence (DGGI) in Gurugram has arrested Ritesh Aggarwal in connection with a massive Input Tax Credit (ITC) fraud totalling Rs 376 crore. Aggarwal allegedly operated seven fake and non-existent firms to fraudulently claim and encash ITC, primarily through IGST refunds by falsely declaring the export of cigarettes. He had previously been issued a show cause notice for a similar offence and is also implicated in a case involving fraudulent drawback claims.

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana, has arrested Shri Ritesh Aggarwal, resident of Bahadurgarh, Haryana on charges of passing and availment of fake ITC while operating dummy, fake and non-existent firms and encashing this unduly availed input tax credit (ITC) through IGST refund mode by showing export of cigarettes.

It became apparent from the investigation that Shri Ritesh Aggarwal , the proprietor of M/s SR Impex was de-facto controller of another firm — M/s SR International. In the supply chain of these firm were found to be six other dummy firms by the names of M/s Joles Trading Co, AS Traders, AR Traders, Om Traders, Capital India & S.M enterprises — all controlled by Shri Ritesh Agarwal. In all these firms, Shri Ritesh Aggarwal had availed and passed on ITC of Rs. 376 crore by means of billing without goods. Shri Ritesh Aggarwal was sanctioned refund of Rs. 37.13 crore from the department.

In addition, Shri Ritesh Aggarwal was found to be a habitual offender. In an earlier case also Show Cause Notice for demand of Rs 26.53 crore was issued to him for similar modus operandi of operating fake firm, M/s SS & Co. (GSTIN 06DJUPD5067G2ZW) and availing and passing on fake ITC.

Fake ITC Fraud: Man Arrested for Rs 376 Cr Scam

Further, Shri Ritesh Aggarwal, who also adopts the alias of Ravi Gupta, was found to be accused in the Show Cause notice dated 01.03.2019 issued by the DGRI wherein fraudulent drawback was availed on imported areca nuts by forging the Certificate of Origins.

The investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement recorded of many suppliers of these firms, it was ascertained that Shri Ritesh Aggarwal is a key person in orchestrating this racket of making fake/non-existent/dummy firms and wrongly availment and passing on on ITC of Rs. 376 crore. Accordingly, Shri Ritesh Aggarwal was arrested on 09.02.2021 and produced before Duty MM, Patiala House Court Delhi, who ordered judicial custody.

Further investigations in the matter are under progress.

FAQ :

Shri Ritesh Aggarwal, a resident of Bahadurgarh, Haryana, was arrested by the DGGI Gurugram Zonal Unit.

The alleged fraud involves the availment and passing on of fake ITC amounting to Rs 376 crore.

He is accused of operating seven dummy, fake, and non-existent firms to fraudulently claim ITC and encash it through IGST refunds by showing exports of cigarettes without actual goods.

Yes, he is considered a habitual offender. He was previously issued a Show Cause Notice for a demand of Rs 26.53 crore for a similar modus operandi and is also accused in a case of fraudulent drawback on imported areca nuts.

He was arrested on 09.02.2021 and produced before the Duty MM, Patiala House Court Delhi, who ordered his judicial custody. Further investigations are ongoing.

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