Mumbai: SME director amongst two arrested in reference to enter tax credit score fraud

CGST officers in Navi Mumbai have arrested the director of Omnipotent Industries Ltd, a just lately listed SME, and the proprietor of Shree Bitumax Trading in reference to an alleged enter tax credit score (ITC) fraud amounting to Rs 70 crore.
According to sources, the tax division arrested Omnipotent Industries Ltd director Punit Popat and Siddhanath Mishra, the proprietor of Shree Bitumax Trading, on Friday for allegedly availing fraudulent ITC of Rs 20.75 crore and Rs 11.31 crore respectively with out receiving any items or providers, which is in violation of the provisions of the CGST Act 2017.
Both Popat and Mishra have been remanded in judicial custody for 14 days.
The GST division has alleged that Omnipotent and Shree Bitumax availed faux ITC from non-existing entities and handed on the identical to 12 different entities. They have, in flip, availed and handed on ITC of about Rs 38 crore.
According to sources, at the very least 14 extra entities throughout Mumbai, Navi Mumbai, Raigad, Thane, Pune and Nagpur are beneath probe for allegedly issuing bogus invoices of Rs 385 crore with none receipt or provide of products.
Omnipotent and Shree Bitumax are within the enterprise of buying and selling bitumen, asphalt, oil shale and tar sand.
CGST officers have additionally referred this case to the Securities and Exchange Board of India (SEBI), because the tax authority has alleged that Omnipotent had indulged within the ITC fraud to spice up its flip over for elevating cash from public by way of an preliminary public providing (IPO).
In November 2021, Omnipotent was listed on the BSE SME platform. Its public problem was for 30 lakh fairness shares at a value of Rs 63 a chunk, aggregating to Rs 18.9 crore. The present value of an Omnipotent share is Rs 50.
The tax authority now desires SEBI to additionally probe the agency to see if it has misused the cash raised from traders by way of its IPO, mentioned sources.
“The company was listed last year in November and the possibility of misuse of funds, generated from fake ITC network, for other financial gains cannot be ruled out,” mentioned a tax supply.

In the final 4 months, the CGST division has lodged over 500 instances of tax evasion, arrested 40 folks and detected tax evasion to the tune of Rs 4,550 crore. The division has to this point recovered taxes of over Rs 600 crore.
Most just lately, the CGST division in Mumbai recovered over Rs 49 crore from cryptocurrency trade WazirX in a case of alleged tax evasion.