The Directorate of GST Intelligence (DGGI) has uncovered a massive fake GST firm scam worth between Rs 5,000 and Rs 8,000 crores. The scam revolves around 246 fraudulent GST firms set up by the prime accused, Ashrafbhai Ibrahimbhai Kalavadiya (50), a resident of Surat, Gujarat. The scandal was exposed when the DGGI's Pune Zonal Unit discovered that a Pune-based company, registered under the name of an unsuspecting auto-rickshaw driver, was involved in fake transactions.
An FIR was lodged by DGGI officer Rushi Prakash at Koregaon Park police station, implicating Kalavadiya and others, including Nitin Barge, Faizal Mevalal, Nizamuddin Khan, Amit Singh, and others, for orchestrating the multi-crore scam under sections of the Indian Penal Code (IPC) and the Information Technology Act.
Investigations began in October 2023 when suspicious transactions were flagged in the account of a company named Pathan Enterprises, registered in Pune. However, further investigation revealed that Pathan Enterprises did not exist, and its registered owner, Pathan Shabbir Khan Anwar Khan, was an auto-rickshaw driver from Bhavnagar, Gujarat, unaware of the firm in his name.
DGGI found that Kalavadiya, using multiple fake identities, had registered these companies to generate fake GST bills and evade taxes. He had opened 246 fake GST firms, including Pathan Enterprises, through which he defrauded the government of Rs 5,000 to Rs 8,000 crores between 2018 and 2024. No real business was conducted by these firms, and Kalavadiya never paid any actual GST.
The investigation led DGGI officials to carry out raids across Pune, Mumbai, Rajkot, and Bhavnagar. Kalavadiya was arrested from a hotel in Mira Bhayandar, Mumbai, in March 2024, with 21 cell phones, two laptops, 11 SIM cards, and various bank-related documents seized from his possession. He is currently in judicial custody in Pune’s Yerwada jail.
The investigation revealed that Kalavadiya was not acting alone. Nitin Barge was allegedly managing the fraudulent GST bills, while Faizal Mevalal handled the cash transactions. Nizamuddin Khan supplied SIM cards and fraudulent bank accounts, and Rahul Bariyya was involved in selling fake GST firms and accounts.
Authorities have also uncovered that Kalavadiya had been previously booked in Gujarat for his involvement in similar fake GST billing frauds. The investigation is ongoing, and police expect more arrests as they continue to uncover the full extent of the scam.
This case highlights the growing issue of fake GST firms being used to defraud the government and evade taxes, underscoring the importance of continued vigilance and enforcement by GST authorities.
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