The Goods and Services Tax (GST) department has arrested Pragnesh Kantaria, the alleged mastermind behind a massive ₹186 crore GST scam. The arrest followed extensive raids at Fortune Copper Industries, Infinity Exim, and 14 other companies associated with Kantaria, unearthing widespread fraudulent activities.
Key Highlights of the Case
- Fraudulent Billing Operations: Kantaria, involved in copper trading across Rajkot, Surat, Bharuch, Vapi, Junagadh, and Bhavnagar, allegedly created fake invoices for copper purchases that never took place.
- Illegal Input Tax Credits: Investigations revealed that Kantaria fraudulently claimed input tax credits (ITC) worth ₹34 crore on fictitious transactions totaling ₹186 crore, violating Section 132(1)(a) of the GST Act.
- Initial Arrests: Earlier, on November 13, Sandip Varani, a partner at Fortune Copper Industries, was arrested for a related ₹19.46 crore GST fraud. The raids also exposed illegal practices at Kantaria’s office.
- Government Treasury Impact: The fraudulent claims have caused a ₹34 crore loss to the government treasury, with the total scam amount expected to rise as investigations progress.
Implications of the Scam
This case highlights the ongoing challenge of curbing GST fraud in India. Fake invoicing and misuse of ITC provisions undermine the integrity of the tax system, causing significant revenue loss. The GST department’s proactive measures, including raids and arrests, aim to strengthen compliance and deter similar frauds.
Legal Proceedings and Future Steps
Kantaria’s arrest marks a significant development in this high-profile case. The GST department is conducting further verifications and expects to uncover more fraudulent activities linked to his businesses. Authorities are likely to initiate stringent legal action to recover the defrauded amount and ensure accountability.
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