How pan-India probe led to uncovering of multi-crore GST scam in Gujarat

“At the beginning of 2023, the DGGI launched a sweeping investigation into a major GST evasion racket against companies involved in fraudulent transactions across Gujarat and Maharashtra,” read the application filed by the DGGI in the Gujarat High Court.

“The initial probe uncovered approximately 220 Gujarat-based businesses and individuals involved in this widespread fraud. These entities were operational in various parts of the country, exploiting GST operations based on fake identities and fraudulent documents,” it said.

Also read: Journalist Mahesh Langa, accused in GST fraud, withdraws remand-quashing plea

Further, the application said, the probe was part of a nationwide investigation launched since 2020.

“From the year 2020 until August 2024, tax evasion to the tune of ₹1.2 trillion using fake ITC has been discovered. So far, 29,273 bogus firms involved in fake ITC have been detected. In the October-December quarter alone in 2023, 4,153 bogus firms that were involved suspected ITC evasion of around ₹12,036 crore were detected,” read the application.

Maharashtra tops list of bogus firms

Himanshu Joshi, an intelligence officer with the DGGI, Ahmedabad zonal office investigating the Gujarat part of the case, told The Federal the investigation initially was a two-month special all-India drive launched on August 16, 2020 to detect suspicious and fake GSTINs.

However, witnessing the magnitude of the case, a second all-India drive was initiated.

Also read | Maharashtra, Karnataka, Gujarat largest GST contributors in April; UP pips TN

“Maharashtra tops the list with 926 bogus firms detected so far, followed by Rajasthan, where 424 firms were detected. During the December quarter, the suspected tax evasion by 926 bogus firms in Maharashtra worked out to ₹2,201 crore. Eleven persons were arrested in the case in Maharashtra,” added Joshi.

“The Gujarat case is also a part of the same ongoing pan India investigation into bogus ITC claims. In the Gujarat part of the investigation, 220 firms have been detected and 10 people including a journalist has been arrested so far. The entire Gujarat operation was spearheaded by one firm – Dhruvi Enterprise – that was utilising fabricated or altered documentation to fraudulently claim substantial amounts of ITC without actual transactions,” he further said.

Modus operandi

“While investigating call detail records (CDRs), customer application forms (CAFs), return filing patterns and bank accounts, it was found that the syndicate has been operating from various locations nationwide, established bogus entities using aliases, forged legal papers like rent agreements and even circumvented biometric requirements to issue SIM cards. The 220 firms based out of Gujarat have operation in 33 locations across the country which are also being investigated,” Joshi added.

Noticeably, the scam reportedly occurred between February 2023 and the end of April 2023. The DGGI lodged a formal complaint on October 5, 2024, initiating the investigation across Gujarat.

As per the complaint filed by the Ahmedabad zonal branch of DGGI, Dhruvi Enterprise issued fake bills to facilitate bogus ITC claims for other entities. Adding to that, multiple GST registrations were obtained using the same PAN card across different locations. Dhruvi Enterprise provided ITC to 12 companies and claimed credit from companies whose GST registrations had already been cancelled.

Also read | July GST figures not to be released, future data may be brief: Reports

Further, the investigation uncovered that a single mobile number and email ID were used to register six GST accounts. This fraudulent operation created a network of 34 companies and obtained an additional 186 registrations, with 50 of them located within Gujarat.

Companies named as part of the scam

According to Bharat Patel, the ACP of the Crime Branch Ahmedabad, the Ahmedabad Crime Branch began its investigation into the case from October 7, 2024, after the official complaint lodged by the DGGI.

Raids were conducted across seven districts and some builders and Mahesh Langa were identified as the brain behind the scam in Gujarat, Patel told The Federal. Further, Patel said, the investigation revealed the following individuals and companies as part of the scam:

Arham Steel - Nimesh Vora, Hetalbehan Vora

Om Construction Company - Rajendrasinh Saravaia, Vanrajsinh Saravaia, Brijrajsinh Saravaia, Hitvarajsinh Saravaia

Shree Kankeswari Enterprise - Kalubhai Wagh, Prafulbhai Waja, Manan Waja, Jayeshbhai Waja, Vijay Wagh

Raj Infra - Ratnadeepsinh Dodia, Jayeshkumar Sutaria, Arvinand Sutaria, Haresh Construction Company - Nilesh Nasit, Jyotish Gondalia, Prabhaben Gondalia

Ethiraj Construction Pvt. Ltd. - Nilesh Nasit, Jyotish Gondalia, Prabhaben Gondalia

BJ Odedara - Bhagirath Odedara, Bhojabhai Odedara, Keshubhai Odedara, Bhojabhai Jessabhai Odedara, Abhabhai Jessabhai Odedara

RM Dasa Infrastructure Pvt. Ltd. - Nathabhai Dasa, Ramanbhai Dasa

Aryan Associates - Ajay Barad, Vijaykumar Barad, Ramesh Kalabhai Barad

Prithvi Builders: Paresh Pradipbhai Dodhia, Paresh Pradipbhai

Dodia Builders - Paresh Dodia

Also read | 'Benami firms, bogus ITC, fake bills': What we know about Mahesh Langa case till now

“However, DA enterprise or Dhruvi Enterprise owned by Manoj Langa and Vinu Patel is at the centre of the investigation as many of these firms are shell companies of Dhruvi Enterprise. Manoj Langa is the cousin of journalist Mahesh Langa, who is the one of the directors of the company. We found that earlier this year, Vinu Patel was replaced by Langa’s wife as director of the company,” added Patel.

Reportedly, the Enforcement Directorate (ED) is joining the investigation of the scam that is currently being investigated jointly by the Crime Branch Ahmedabad and DGGI Gujarat.