LUDHIANA: Zonal unit of the Directorate General of GST Intelligence (DGGI) has unearthed a bogus billing network involving circular trading of Rs 630 crore being run in the city.
In the operation that had been going on for two days, the DGGI on Wednesday arrested a timber and plywood businessman of the city for his alleged involvement in the nexus being run by using 15 firms, 12 of which have been found to be non-existent.
The accused has been sent to judicial remand till July 7.
A highly-placed source in the department said, “Based upon intelligence gathered, simultaneous searches on 16 premises were conducted by different teams of 35 DGGI officials.
During the investigation, it was found that 15 firms were involved in circular trading and supply, which started from three firms and returned to them after routing through 12 dummy or non-existent firms.
These 12 firms were shown to be operating from different non-existent addresses with dummy proprietors, who were either current or ex-employees of the three firms owned by Barinder Singh and his family.
The entire operation and bank accounts were being managed by him.” The source said, “As being partner and operator of three firms, Singh was the key person responsible for collecting and using the documents of other persons for floating fictitious firms and was involved in bogus outward supplies of Rs 600 crore approximately, involving input tax credit (ITC) of Rs 94 crore and fake inward supplies of Rs 630 crore, with ITC of Rs 98 crore.
He was found to be operating and managing 12 fictitious firms for issuing fake invoices for availing and passing inadmissible ITC without supply of goods by undertaking circular trading.
Three trading firms of timber and plywood were found to be engaged in making outward supplies to six firms and thereafter these firms were repeating the process with other six firms, which finally returned the goods to the three firms.” Source said recovery of incriminating evidence, including electronic and IT devices, from the residential and business premise of Singh during the search revealed his involvement in creating and managing these dummy firms.
Various suppliers and buyers of these firms are under the radar of the department.
Further investigation is on.