GST scam worth ₹8,000 cr finds its roots in Surat

Updated: Oct 28th, 2024


A GST scam amounting to ₹8,000 crore has come to light, involving the creation of 246 shell companies by a resident of Surat to fraudulently claim input tax credits. This discovery was made during an investigation by the GST department in Pune.

Ashraf Kalawadiya,who was already arrested by Police is now found to be orchestrating the GST scam, along with other accused, he opened 246 fake companies and orchestrated a massive ₹8,000 crore fraud. 

On Friday, officials from the DGGI (Directorate General of Goods and Services Tax Intelligence) filed a complaint at the Koregaon Park police station in Pune, leading to the registration of an FIR.

The main accused, Ashraf Kalawadiya (50), along with Nitin Barage, Faizal Mewalal, Nizamuddin Khan, Amit Singh (Ulhhasnagar), Rahul Baraiya, Kaushik Makwana, Jitendra Gohel, and others, have been charged under various sections of the IPC, including 420 (cheating), 465 (forgery), 467 (forgery of valuable security), 471 (using as genuine a forged document), and 120(B) (criminal conspiracy), as well as multiple sections of the IT Act.

According to the FIR, in October 2023, the DGIGI team discovered suspicious transactions involving Pathan Enterprises, a company based on the Pune-Solapur Highway. During the investigation, investigators learned that the described company did not exist in the specified location or elsewhere.

Further investigation revealed that a company was registered in Bhavnagar under the name of Pathan Khan. When the DGGI team questioned Khan, who turned out to be an auto rickshaw driver, was shocked and said he didn't know any company registered under his name.

Which prompted the DGGI officials to conduct a detailed investigation into a specific mobile number and email address used to register these fake companies, including Pathan Enterprises. 

During this process, the investigating team identified a person named Jeet Kukdiya, who had an account at ICICI Bank in Rajkot. However, it was revealed that Kukdiya worked as a private security guard and had opened the account for the accused Kaushik Makwana and Jitendra Gohel. Kukdiya claimed he had never used that account.

Based on information obtained during this investigation, raids were conducted in cities like Pune, Mumbai, Rajkot, and Bhavnagar. 

It was discovered that Kalawadiya, the main suspect and mastermind, was running Pathan Enterprises and other fraudulent businesses. 

Further investigations found that Barage was allegedly managing his illicit bank accounts and bogus firms in Mumbai, while Mewalal was apparently handling Kalawadiya’s financial transactions. 

Another accused, Nizamuddin Khan from Mumbai, was providing SIM cards and KYC details of individuals for opening bank accounts. Amit Singh allegedly played a role in setting up the fake companies, while Rahul Baraiya assisted in their sales, as stated in the FIR.

Now the FIR against Kalawadiya has been registered as the mastermind of the scam and further probe is carried out in the same.

Also read :

Bogus GST bill scam: Search for MLA’s nephew, 34 others on

ED joins crackdown on shell companies involved in GST scam

Jamnagar accountant uses his factory owner’s closed GST number to claim ₹5 cr input tax credit

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