Fake Billing

The Gujarat State Goods and Services Tax (SGST) department has unearthed a massive bogus billing network in Jamnagar involving fake transactions worth ₹560 crore and tax evasion estimated at Rs. 112 crore. The alleged mastermind behind the operation is Jamnagar-based CA Alkesh Pedhadiya, who, through an intricate web of shell firms and fraudulent documentation, orchestrated large-scale issuance of fake invoices to facilitate wrongful Input Tax Credit (ITC) claims. The SGST department, acting on precise intelligence inputs, carried out simultaneous search operations on October 3across 25 locations in Jamnagar and nearby areas. The raids covered the office of BRAHM Associates, the CA firm where Pedhadiya is a partner, as well as his residence and other business premises. A total of 27 teams from various GST offices across Gujarat were mobilized for the statewide enforcement drive, conducted under the provisions of the Gujarat Goods and Services Tax Act. Preliminary investigation has revealed that at least 14 non-genuine taxpayer (NGTP) firms were involved in issuing bogus invoices without any actual movement of goods. These fake firms were allegedly created and operated under the direct supervision of Pedhadiya, the SGST statement said. Statements recorded from individuals linked to these entities suggest that most of the firms were “fronts” with no real business activity. Funds were allegedly circulated through multiple accounts to conceal the trail and create a façade of legitimate transactions. Officials also discovered large-scale misuse of GSTIN credentials belonging to genuine taxpayers. Several of these unsuspecting taxpayers told the department they were deceived under the guise of GST compliance and accounting support services. Many have expressed intent to file criminal complaints for fraud and breach of trust. During the searches, SGST officials seized voluminous documents, computer systems, and digital storage devices containing key evidence of fictitious invoicing, manipulation of financial records, and fund diversion. Preliminary forensic analysis pointed to multiple layers of financial transactions routed through numerous bank accounts, indicating a sophisticated money trail designed to evade detection. A few firms under scrutiny have reportedly acknowledged their involvement and agreed to settle their pending tax dues along with interest and penalties, the department noted. Officials said further investigation is underway to trace the ultimate beneficiaries of the fraudulent ITC claims and determine whether any intermediaries or clients of the accused CA were complicit in the racket. The SGST department has reiterated its commitment to intensify surveillance and enforcement action against tax evasion and professional misconduct under the GST framework, warning that such fraudulent practices will invite stringent legal consequences. Read More: Bombay High Court Quashes CESTAT’s Order Citing Huge Delay In Passing Order

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