THE Directorate General of Goods and Services Tax Intelligence (DGGSTI) has arrested the promoters of two Mumbai-based textile firms for an alleged Central Goods and Services Tax (CGST) fraud of about Rs 625 crore.
The agency arrested Urvil Jani, director of Oneworld Industries Pvt Ltd, and Rajesh Gulwantrai Mehta of Rajesh Mehta Group of firms for allegedly availing input tax credit (ITC) and passing on credit based on fake invoices of Rs 155 crore and Rs 471 crore respectively. “Issuance of invoice or bill without supply of goods or services and availing input tax credit using such bogus invoice are both cognizable offence under the norms,” said a source.
The DGGSTI has also written to the National Company Law Tribunal (NCLT) to remove Oneworld Industries from the Insolvency and Bankruptcy Code (IBC) proceedings as one of the operational creditors of the textile firm dragged it to bankruptcy court with its connivance, sources told The Indian Express.
Last month, Shanaya Fashions, an operational creditor of One World Group, moved NCLT against Oneworld Industries to recover over Rs 7 crore. The tribunal appointed an interim resolution professional (IRP) as per the bankruptcy process. The DGGSTI has found that Shanaya Fashions has not provided any services to One World Industries as claimed before the NCLT and has been allegedly acting on the instructions of Oneworld Industries.
Oneworld Industries alone owes Rs 140 crore to Punjab National Bank, Bank of Baroda and Tamilnad Merchantile Bank. Its group firm Zephyr Fabric Trading LLP, which has also been dragged to NCLT, owes Rs 43 crore to Indian Bank. The other nine group firms too have taken loans from various public and private banks.
Interestingly, both Oneworld Industries and Zephyr Fabric have told the NCLT they are “facing acute difficulties in realisation of receivables mainly on account of demonetisation, implementation of GST by the government and related procedural technicalities of e-way Bill etc and unfavourable market conditions which have affected fabrics business”.
The DGGSTI probe has now found that Oneworld Industries, Rajesh Mehta Group of firms and their 23 subsidiaries have availed ITC on bogus invoices without receiving any services and also issued fake invoices to other companies without providing any services.