The Surat zonal unit of the Directorate General of GST Intelligence (DGGI) has unearthed a large-scale fake input tax credit (ITC) fraud involving a web of firms operating out of Ahmedabad and Surat, leading to the arrest of three key individuals namely Niral Shah, Director of Computtronix Infotech Pvt Ltd, Jyoti Kumar Choraria, Proprietor of Mangaldeep Inc, and Babulal Sharma, Proprietor of RT Enterprise.
The investigation has so far revealed fraudulent transactions worth nearly Rs. 450 crore, resulting in an estimated GST evasion of about ₹80 crore.
According to officials, the racket was being operated through Ahmedabad-based RT Enterprise and Surat-based Mangaldeep Inc and Computronix Infotech Pvt Ltd. These entities were allegedly engaged in the systematic generation and circulation of fake GST invoices without any actual supply of goods. The sole purpose of these transactions was to unlawfully claim and pass on input tax credit, in clear violation of the provisions of the Central Goods and Services Tax (CGST) Act.
Sources in the department stated that Computronix Infotech Pvt Ltd is a well-known player in the IT infrastructure and computer hardware segment in Surat and has been active in the market for over 20 years. Despite its established presence, investigators found that the transactions attributed to the firm in this case were not supported by genuine business activity.
The investigation revealed that the purported business operations were entirely sham. While GST returns and invoices indicated substantial commercial activity involving high-value goods, there was no evidence of actual movement of goods. Officials confirmed that the invoicing was merely on paper, created to give legitimacy to bogus ITC claims.
Further, investigators traced the flow of funds through multiple bank accounts to create an illusion of genuine trade transactions. The money was subsequently withdrawn and routed back in cash through angadia networks, reinforcing the conclusion that the entire arrangement was designed to generate and monetize fake input tax credit.
DGGI officials suspect that the case is part of a much larger ITC fraud network, and the quantum of wrongful credit is likely to rise significantly as further links in the chain are examined. Authorities emphasized that ITC fraud is not a minor procedural violation but a form of organized economic crime.
“By availing tax credit without paying actual tax, such fraudsters cause direct loss to public revenue, undermine the integrity of the GST system and place compliant businesses at an unfair disadvantage,” an official said, adding that strict action will continue against those involved in such rackets.
The investigation is ongoing, and further arrests and recovery are not being ruled out as the probe expands.
