Gujarat GST Dept Busts Bogus ITC Scam, 11 Fake Firms Busted; Nataraj Industries Owner Held

Ahmedabad: The Gujarat State Goods and Services Tax (GST) Department has uncovered a large-scale bogus Input Tax Credit (ITC) scam involving 11 firms following a state-wide search operation. The preliminary investigation has revealed a tax liability of ₹79.45 crore, while bogus purchase and sale transactions worth around ₹119 crore have been detected so far.

The investigation found that the firms allegedly generated and claimed ITC through bills and invoices without any actual movement of goods. Officials said the transactions were recorded on paper to create bogus ITC, with the value of such transactions and the tax liability likely to increase as the probe progresses.

During the investigation, Ajaykumar Satyanarayan Shah, owner of M/s Nataraj Industries and partner of M/s Nataraj Metal Industries, was allegedly found to be involved in bogus purchase and sale transactions worth ₹119 crore. The GST Department said tax evasion of ₹21.49 crore through wrongful ITC was detected in his case.

Considering his alleged active involvement and the seriousness of the offence, the GST Department arrested Shah. The investigation revealed that purchase and sale transactions were recorded through invoices despite there being no actual movement of goods.

Documents, Digital Devices Seized

During the search operation, GST officials seized documents, computers and other digital devices from the premises. The material is being examined to identify the complete network of bogus transactions, other firms allegedly involved and the actual beneficiaries.

The GST Department’s investigation is continuing. Further verification of the seized documents and digital evidence could uncover additional bogus transactions, firms and tax liabilities. The State GST Department has intensified its crackdown on firms allegedly claiming wrongful ITC through bogus billing. DeshGujarat