Fraud with Delhi's Dept of Trade and Taxes lead investigators to 25 suspect firms

New Delhi: The Economic Offences Wing (EOW) of Delhi Police on Sunday arrested two people for duping the Delhi Government's Department of Trade and Taxes of over Rs 9 crore. The police said the GST department has started an inquiry against more than 25 other firms that the accused allegedly ran.

According to Delhi Police, they received a complaint from the Department of Trade and Taxes, in which they claimed that income tax credit (ITC) of Rs 42.40 crore was falsely claimed by one Saraswati Enterprises.

"The said firm was registered in the VAT department using fake credentials of one Sanjay Garg. However, no such firm exists at that address. Moreover, a false bank account was provided in the VAT registration form," Additional Commissioner of Police (EOW) RK Singh said.

The firm claimed an input tax credit of Rs 8.51 crore initially and a further input tax credit of more than Rs 32 crore in the year 2017.

"On claim of such a huge input tax credit, verification was done by the VAT department and it was found that the credential of the claimant was bogus as no firm existed at the given address," the Additional CP said.

Further, no bank account of the alleged company as mentioned was found existing in the concerned bank. Hence, the credit of Rs 31.30 crore was blocked by the VAT department.

"Alleged person, by way of synchronized mapping, has claimed benefit of more than Rs 9 crore, causing loss to the government exchequer," the official said. Police said one Shubham Khandelwal and one Pulkit Goyal were running the firm (Saraswati Enterprises) and they used to issue fake invoices of the goods to the companies and collect VAT, GST charges from the concerned companies but did not deposit the same with VAT, GST Department.

"It was also revealed that no VAT returns were filed by Saraswati Enterprises," the official said, adding that both the accused were arrested.

"They are having good knowledge of brokerage and accounting with working experience with different taxation firms. They have an expertise of opening firms with fake credentials and running the same in the name of non-existing proprietary entities," the official said.

Police said the Directorate General of GST Intelligence is now inquiring about a matter involving more than 25 similar bogus firms being run by these accused persons.