Pharma MD Arrested Over Alleged Rs 5.55 Cr Fake ITC, GST Refund Fraud
Sirmaur: The Preventive Wing of the Central Goods and Services Tax (CGST) Commissionerate, Shimla, has uncovered an alleged GST fraud involving input tax credit (ITC) worth around Rs 5.55 crore in Himachal Pradesh's Kala Amb industrial area. The investigation has led to the arrest of Gaurav Jain, Managing Director of Samay Pharma India Private Limited, Trilokpur.
According to CGST officials, the alleged fraud involved M/s Samay Pharma India Private Limited and M/s Dual Healthcare, which are accused of claiming input tax credit on the basis of fake invoices issued by several firms that were either non-existent or found to be non-genuine. Investigators alleged that ITC amounting to approximately ₹5.55 crore was claimed through invoices linked to 10 such firms.
The investigation further examined whether the supplies mentioned in the invoices had actually taken place. Officials stated that although the invoices reflected purchases of goods, there was no evidence confirming the physical transportation of those goods. Verification of e-way bills and toll plaza records also failed to establish the movement of the goods mentioned in the invoices, raising serious doubts about the genuineness of the transactions.
CGST authorities also alleged that the fraud extended beyond wrongful availment of input tax credit. According to investigators, the allegedly fake ITC was subsequently included in GST refund claims, with the suspected objective of obtaining refunds from the government through the GST mechanism.
During the probe, officials identified multiple suspicious financial transactions, fake business entities and invoices that did not correspond to actual movement of goods. The investigation also indicated that alleged shell entities were being used to manipulate the GST credit and refund system by generating non-genuine invoices.
Investigators recorded statements from several individuals and examined extensive digital evidence, including invoices, transaction records, business entities connected with the invoices and documents relating to the alleged movement of goods. The digital and documentary evidence formed a key part of the ongoing investigation into the suspected GST fraud.
Based on the material collected during the investigation, Gaurav Jain, Managing Director of M/s Samay Pharma India Private Limited, was arrested under Section 69(1) of the Central Goods and Services Tax Act, 2017. The CGST Preventive Wing is continuing its investigation to determine the complete extent of the alleged fraudulent input tax credit and refund claims, reports The420.in
CGST investigators alleged that Samay Pharma and Dual Healthcare claimed ₹5.55 crore in fake input tax credit through invoices issued by 10 non-genuine firms, while e-way bill and toll-plaza verification failed to establish actual movement of goods. The suspected ITC was later used in GST refund claims, leading to the arrest of the company’s managing director.
The investigation remains ongoing, with CGST authorities examining digital records, invoice trails, shell entities and refund transactions to identify the full network involved in the alleged GST fraud.
