The Preventive Wing of the Central Goods and Service Tax (CGST) department has uncovered a major GST evasion scheme amounting to Rs 15 crore. The fraud involved Input Tax Credit (ITC) being claimed on fraudulent transactions by a bitumen company based in Indore.
On Tuesday, Kartik Agrawal and Sheel Panchal, the directors of M/S Pyrol Fuel Industries Private Limited, were arrested and sent to 10-day judicial custody until January 17. According to officials, the investigation revealed that Agrawal and Panchal had fraudulently availed ITC from non-existent firms without receiving any actual goods. This fraudulent credit was then used to offset the company’s outward tax liabilities, in clear violation of Section 16 of the CGST Act, 2017.
Despite multiple summons under Section 70 of the CGST Act, the accused failed to comply, prompting further investigation. Officers from the CGST and Central Excise Commissionerate in Indore conducted searches at four premises of the company on Monday. Based on the evidence collected, Agrawal and Panchal were identified as the masterminds of the fraud and were arrested under Section 69 of the CGST Act.
The company, which deals in bitumen, primarily supplies to road construction contractors, some of whom have also been linked to the case. The investigation is ongoing, with more details likely to emerge in the coming days.
