DGGI busts Rs 118 cr GST refund fraud, nabs kingpin

One person operating through seven companies has been arrested in connection with an alleged Rs 118 crore GST fraud involving fake bills without supplying goods or services, officials said here on Saturday.

The operation was carried out by the Directorate-General of GST Intelligence (DGGI), Mumbai Zonal Unit, which led to the arrest of the mastermind, Santosh Doshi, who is the Managing Director of Masum Overseas Pvt Ltd.

Doshi also runs/controls seven other companies: Amal Overseas, C-Kluster Expotrade, Meticulous Overseas, Ekon Crystalmerchants, Ninad Overseas, White Opal Expotrade and Parees Overseas.

Of these, White Opal Expotrade fraudulently availed input tax credit (ITC) on bogus invoices without actually supplying goods/services to claim refunds of Rs 118 crore against non-existent exports.


Explaining the modus operandi of the financial fraud, DGGI officials said that several dummy companies were formed in Jharkhand and West Bengal using forged documents, which in turn passed the bogus ITCs to shell trading firms acting as intermediary entities in Chhattisgarh.

Several similar fake units were set up as export fronts in Mumbai and Pune, which purportedly acquired the fictitious export goods from Chhattisgarh.

As it turned out, the exporting units were created solely for the purpose of availing ITC refunds fraudulently, without any actual transactions taking place.


During investigations, the DGGI sleuths raided several key persons and officials engaged in exports or freight forwarding and recorded their statements.

The DGGI found that Doshi, a resident of Pune, was the promoter and operator of the above seven export firms, and used a web of complex, multi-layered transactions starting with manufacturers to traders to middlemen to exporters to facilitate encashing the claims under ITC.

Doshi, who was earlier arrested by the Mumbai Customs in another case, was produced before a designated court which shunted him to judicial custody. Further probe is on.-IANS