 "Inside the Rs 8,000 cr GST fraud: 246 fake companies and a mastermind")
Police in Koregaon Park, Pune, have filed a case against eight individuals for criminal conspiracy, cheating, and forgery, with the alleged ringleader identified as Asraf Ibrahim Kalawadiya, 50, from Surat. The suspects are accused of creating 246 fake companies across 13 states to evade Goods and Services Tax (GST), with estimated losses ranging from Rs 5,000 crore to Rs 8,000 crore, according to a report by The Times of India.
The fraud reportedly occurred between September 2018 and March 2024. The GST department initiated the case after uncovering that Pathan Enterprises, a non-existent business in Shiv Chaitanya Colony, Hadapsar, had evaded Rs 20.25 crore in taxes.
Kalawadiya is currently in judicial custody at Yerawada Central Prison following his arrest on March 13, 2024, by the Directorate General of GST Intelligence (DGGI), Pune zonal unit. His seven accomplices remain at large.
Rishi Prakash, a senior intelligence officer with the DGGI, said officials found the phone number and email address used to register Pathan Enterprises were also linked to multiple other fraudulent companies, all of which failed to pay taxes totalling between Rs 5,000 crore and Rs 8,000 crore during the specified period.
According to Senior Inspector Runal Mulla of Koregaon Park police, a preliminary inquiry based on the GST department’s complaint led to the registration of an FIR after verification. The investigation has now been passed to the Economic Offences Wing.
Prakash, who filed the complaint, revealed that Pathan Enterprises was registered under the name of Pathan Shabbir Khan Anwar Khan. His PAN card helped investigators locate his residence in Khumbarwada, Bhavnagar, Gujarat. Khan, who claims to be an autorickshaw driver, stated that he was unaware of any businesses operating under his name, the report said.
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Further inquiries uncovered a bank account in Rajkot, Gujarat, associated with Jeet Kukadiya, who claimed to be a security guard and denied knowledge of the account’s activities. Prakash noted that Kalawadiya was identified as the mastermind after scrutinising bank statements and call records. He was located at a hotel in Mira Bhayander, Mumbai, where a search led to the discovery of multiple cell phones, laptops, SIM cards, chequebooks, debit cards, and rubber stamps.
Kalawadiya confessed to creating multiple fake companies and bank accounts using forged documents for fraudulent activities aimed at tax evasion. He falsely asserted that he operated a scrap material business. However, investigations revealed that fake invoices were issued to 246 fake entities, allowing them to claim input tax credits without actually paying GST. Kalawadiya had previously been arrested by the DGGI in Surat in 2022.