The Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit, has uncovered a large-scale racket involving fraudulent availment and utilization of Input Tax Credit (ITC) by a non-existent firm, M/s R.B Chemicals.  Deepak Aggarwal was the sole active and controlling partner of the firm.

In his voluntary statements, Deepak Aggarwal admitted to procuring fake invoices without actual receipt of goods through a broker identified as Ashish Bansal. He further confessed that M/s R.B Chemicals issued invoices without actual supply of goods to pass on fraudulent ITC to various beneficiaries.

Acting on specific intelligence inputs, the DGGI initiated an investigation into the activities of M/s R.B Chemicals for alleged violations of the provisions of the CGST Act, 2017. As part of the probe, search operations were conducted at the firm’s declared principal and additional places of business, as well as at the residential premises of its partner, Deepak Aggarwal.

During the course of the search, it was discovered that the firm was non-operational at all its declared locations. The premises were found to be non-existent or inactive, establishing that no genuine business activity involving supply of goods was being carried out. This strongly indicated that the entity was merely engaged in issuing invoices without any underlying supply of goods.

Deepak Aggarwal was responsible for all key operations, including procurement, sales, banking transactions, GST compliance, and financial management. Other listed partners were found to be merely nominal or “sleeping” partners with no actual involvement in the firm’s activities.

The probe also extended to the supplier firms from whom M/s R.B Chemicals had claimed ITC. Verification revealed that these entities were non-existent and fictitious. Field inquiries and recorded statements of the purported proprietors established that their identity documents had been misused to obtain GST registrations.

Statements recorded under Section 70 of the CGST Act from individuals linked to firms such as M/s M.J. Enterprises, M/s A.R Enterprises, and M/s Suraj Enterprises confirmed that they had no knowledge of such businesses. This conclusively proved that the supplier firms were created solely for issuing fake invoices.

The investigation also uncovered a deceptive modus operandi adopted to lend credibility to these fictitious transactions. Vehicles carrying drums filled with water were used to simulate the transportation of goods, and e-way bills were generated to create a façade of legitimate movement.

Based on the investigation and the admissions made, it has been established that the accused fraudulently availed ITC amounting to ₹32.76 crore on the strength of invoices issued by non-existent suppliers. Additionally, invoices involving a tax amount of ₹23.50 crore were issued without any actual supply of goods, facilitating the wrongful availment and utilization of ITC by recipient entities.

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