The economic offences cell of city police busted a major GST input tax credit racket in which refund was allegedly usurped using bogus bills of transactions worth Rs 200.
Police arrested 12 people, including five from Bhavnagar, who had set up or 'used' as many as 21 shell companies using fake documents like electricity bills and rent deeds to get GST numbers.
Assistant commissioner of police (ACP), Virjeetsinh Parmar, economic offences cell, said he had received specific information about the fraud and a team of 50 cops simultaneously raided around 10 locations in Ahmedabad, Rajkot, Surat, Bhavnagar, Morbi and Junagadh.
"The total transaction by these 21 shell companies is close to Rs 200 crore. However, this is likely to increase," said an official. According to sources, some big fish are involved in the scam but police refused to divulge more details. "The investigation is still continuing and we cannot declare the exact details at present. More details will be shared once the operation is complete," said an investigating official.
Majority of the shell companies based on fake documents had shown scrapping as their business.
Police found that the accused prepared fake bills of scrap shown transactions on paper to claim the GST refund. GST on scrap is around 18% and police are yet to find out exactly how much tax refund has already been claimed.
Police have rounded up 12 persons of which five have been arrested after police got evidence against them. Those arrested were Aftab Solanki, Abdul Rehman, Edrush Miyan Saiyed, Jafar Badbet and Mohommad Faizal Aauliya, all residents of Bhavnagar.
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