DGGI (Hqrs.) booked a case on 06.03.2020 against M/s Aastha Apparels Pvt Ltd & others. Aforesaid companies have fraudulently claimed IGST refunds on export of goods to the tune of more than ₹ 61 Crores.

It has been revealed that ITC has been fraudulently availed by M/s Aastha Apparels Pvt Ltd & others on the basis of invoices received from non-existent/non-functional firms/companies or from companies which have indulged in circular trading. The said firms/companies also did not have commensurate purchases backwards. It has been further revealed that the supplier companies to these exporter companies are controlled & managed by few persons only and they are also engaged in claiming of suspect IGST refunds. These companies have created a complex web of circular trading among themselves without commensurate payments or actual supplies of goods to pass on ineligible ITC to the Exporters.

Two directors of aforesaid exporter companies have been arrested on 07.03.2020 under Section 69(1) of CGST Act, 2017 for offences under provisions of Sections 132(1)(b) & 132(1)(c) of the CGST Act 2017. Role of suppliers and other persons associated with these Exporters is under investigation.

Further investigations in the matter are in progress.

IGST refund fraud investigation leads to arrests and ongoing probes into circular trading and fake supplier networks. Fraudulent IGST refund claims were enabled by a controlled network of non existent or circular trading suppliers issuing invoices without commensurate purchases, allowing exporters to pass on ineligible input tax credit and obtain refunds; two directors were arrested under Section 69(1) in connection with alleged offences under Section 132(1)(b) and 132(1)(c), and investigations into other suppliers and persons continue.