The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana, has earlier busted a case wherein total fake ITC of  ₹ 176 crore has been fraudulently passed on by Sh. Sanjay Goel, Prop of M/s. Redamancy World, and Sh. Deepak Sharma, the de–facto controller of 8 non-existent firms. Accordingly Sh. Sanjay Goel, Prop. of M/s. Redamancy World and Sh. Deepak Sharma has been already arrested by this office, in the matter. On further investigation role of two more key persons, Sh Manish Modi and Sh. Gaurav Agarwal has also been surfaced.

Based on details revealed by further investigation this office has arrested, Sh Manish Modi, Chartered Accountant, resident of Pitam Pura, New Delhi, on charges of creation of running racket of fake firm in order to fraudulently pass on fake Input Tax Credit (ITC), without actual supply of goods or services. It was found that Sh. Manish Modi is managing/controlling  fake firms M/s. Nivaran Enterprises, and M/s Panchwati Enterprises through which he has fraudulently passed on fake ITC to the tune of Rs.  36 crore. Further he has also been found in possession of incriminating evidences indicating many more such firms might be controlled/managed by him for similar purpose, further investigation for same is under way.

Name of Sh. Gaurav Agarwal, Partner of M/s. Agarwal & Company (authorized dealer of ITC) has also emerged as another key person involved in the instant racket of fraud ITC. He has fraudulently passed on fake Input Tax Credit (ITC) amounting to ₹ 15 crore (including GST and Cess), thus has been arrested by this office on similar charges. 

Accordingly, Shri Manish Modi and Sh. Gaurav Agarwal were arrested on 23.08.2021 and produced before, Duty MM Delhi, who ordered judicial custody for 14 days. Fake ITC of more than ₹ 36 crore and 15 crore, respectively, fraudulently passed on by two persons.

Further investigations in the matter are under progress.

Input tax credit fraud uncovered; alleged use of shell firms to pass fake ITC prompts arrests and ongoing probe. Allegations of a racket to fraudulently pass on Input Tax Credit through shell entities prompted arrests after DG-GST Intelligence investigations traced creation and control of non existent firms issuing fabricated invoices. A chartered accountant is accused of managing identified fake firms and holding further incriminating evidence, while a partner at an accounting firm is accused of facilitating fake ITC transfers; both were remanded and further investigation is ongoing to identify additional controlled entities and documentary proof.