A Customs inspector posted in Ahmedabad has been arrested for his alleged role in a large-scale tax fraud involving the illegal availing of input tax credit (ITC) on exports.
The accused, Inspector Roopram Yadav, was arrested by officials of the Directorate of Revenue Intelligence (DRI) in connection with a long-running racket suspected to have siphoned off crores of rupees by misusing IGST and compensation cess benefits on exports.
Fake Energy Drink Exports Used to Claim ITC
According to investigators, the fraud revolved around the export of so-called energy drinks, which attract a combined IGST and cess incidence of nearly 40 per cent. Export consignments were allegedly cleared from the Khodiyar Container Depot in the name of a fictitious firm, Dharmaraj Enterprise, which existed only on paper.
Investigations revealed that the bottles declared as energy drinks contained nothing more than sealed, coloured water. By showing inflated export values and higher tax incidence goods, the racket is believed to have generated substantial bogus IGST refunds.
Misuse of IEC and Official Facilitation Suspected
Sources said that an Import Export Code (IEC) belonging to an associate of another Customs inspector was used to facilitate these exports. As multiple consignments had already been shipped, officials estimate that the fraudulent input tax credit claimed could run into several crores of rupees.
DRI officials reportedly recovered digital evidence linking Inspector Yadav directly to the operation. His arrest was made after investigators established that the alleged illegal gains exceeded Rs 2 crore, the statutory threshold for invoking arrest provisions under the GST laws.
Suspension and Further Arrests Likely
Following a formal communication from the DRI, the Customs Department placed Roopram Yadav under suspension on January 12. Investigators have also indicated the possible involvement of another Customs inspector or official, and a detailed probe into their role is currently underway.
Officials said further arrests cannot be ruled out as the investigation progresses and the full extent of the export-linked GST fraud comes to light.
CAclubindia
