Bhubaneswar: A joint team of police and GST officials on Monday arrested a man for allegedly creating fictitious firms and committing Input Tax Credit (ITC) fraud to the tune of Rs 10 crore in the capital city.
The accused identified as Smruti Ranjan Sahu of Bapuji Nagar area in Bhubaneswar was running several firms with fake documents. He had allegedly opened the firms in the name of rickshaw pullers and students. As many as seven such fake units were operating in Bhubaneswar and Rourkela, according to sources.
A scrap dealer Smruti Ranjan had showed an annual turnover of Rs 40 crore, officials said.
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After verifying all his documents, the GST officials raided his house at Bapuji Nagar with the help of police and nabbed him after he failed to produce valid documents regarding the huge transactions.
He will be forwarded to court today, officials said. The officials have also confirmed the evidence based on which the arrest was made.
His iron scrap trade has a link to Rourkela from the State Capital. He was running some firms in Bhubaneswar while some others were functioning in the Steel City. However, all the companies were benami and registered with fake accounts. Sahu had used fake names and identities of gullible persons in a bid to evade tax.
He used to pass on fake ITC to his clients in exchange for some commission of the invoice amount, sources said. The tax invoices were issued in the name of bogus entities to avail the ITC.
Smruti Ranjan had managed to arrange various KYCs of different persons without their knowledge and created fake firms in their name who have no business activities in any manner, reports said.
In December last year, the GST sleuths had arrested a business man identified as Santosh Gupta for evading GST to the tune of Rs 40 crore by creating fake firms.