Central Goods and Services Tax, Mumbai West, Investigation team has announced the arrest of Mr. Chandraprakash Pandey, Partner of M/s. C.P. Pandey & Associates. He was arrested on account of indulging in circular trading by way of issuing fake invoices, availing and passing on fraudulent Input Tax Credit (ITC) involving GST of Rs 10.63 Crores (approx.) on turnover of Rs. 59.10crores (approx.)
On the basis of specific intelligence gathered by the GST Officials of Investigation Wing, Mumbai West Commissionerate, investigation was conducted revealing that Mr. C.P. Pandey, CA & Partner have created numerous companies in the name of his family members which were indulging in issuance of invoices without any actual supply of goods/services. Also was enabling other companies to avail ITC on invoices for which no goods/services were supplied, in violation of provisions of the CGST Act, 2017.
This modus operandi enabled buyers/other companies to avail inadmissible ITC thereby causing loss to the government exchequer and also to inflate the turnover in these companies enabling them to obtain bank loans. These transactions are nothing but paper transactions with no actual supply of goods, which in commercial parlance is circular trading.
The preliminary investigation has unveiled a network of around 50 firms registered in the same premises and involved in fraudulent activity of circular trading.
Mr. C.P. Pandey, was arrested on 10th December, 2020 and produced before the Magistrate Court, Mumbai on 11th December, 2020, wherein he was remanded to judicial custody for14 days. Further investigation is under progress.