The Directorate General of GST Intelligence (DGGI) on Saturday said it has registered a case against Aastha Apparels Pvt Ltd and others for fraudulently claiming refunds on export of goods of over Rs 61 crore.
"DGGI booked a case on March 6, 2020 against Aastha Apparels Pvt Ltd & others. Aforesaid companies have fraudulently claimed IGST refunds on export of goods to the tune of more than Rs 61 crore," the Finance Ministry said in a release.
The intelligence directorate said the Aastha Apparels Pvt Ltd and others availed input tax credit (ITC) fraudulently on the basis of invoices received from non-existent or non-functional firms or from companies which have indulged in circular trading.
DGGI said two directors of the exporting companies have been arrested on March 7, 2020 under Section 69(1) of CGST Act, 2017 for offences under provisions of Sections 132(1)(b) and 132(1)(c) of the CGST Act 2017.
"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 and managed by few persons only and they are also engaged in claiming of suspect IGST refunds," said the release.
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, it added.
Role of suppliers and other persons associated with these Exporters is under investigation.
"Further investigations in the matter are in progress," it said.