CGST officials in Navi Mumbai arrested the director of Omnipotent Industries Ltd, a recently listed SME, and the owner of Shree Bitumax Trading in alleged input tax credit (ITC) fraud in the amount of Rs 70 crore.
According to sources, the tax department on Friday arrested Omnipotent Industries Ltd director Punit Popat and Siddhanath Mishra, the owner of Shree Bitumax Trading, for allegedly using a fraudulent ITC of Rs 20.75 crore and Rs 11.31 crore respectively without receiving goods or services, which is in violation of the provisions of the CGST 2017 law.
Popat and Mishra were remanded in custody for 14 days.
The GST department alleged that Omnipotent and Shree Bitumax took advantage of bogus ITCs from non-existent entities and passed it on to 12 other entities. They, in turn, took advantage and passed on the ITC of around Rs 38 crore.
According to sources, at least 14 other entities in Mumbai, Navi Mumbai, Raigad, Thane, Pune and Nagpur are under investigation for allegedly issuing bogus invoices of Rs 385 crore without any receipt or delivery of goods.
Omnipotent and Shree Bitumax are in the business of bitumen, asphalt, oil shale and oil sands.
CGST officials also referred this matter to the Securities and Exchange Board of India (SEBI), as the tax authority alleged that Omnipotent engaged in ITC fraud to increase its turnover to raise funds. to the public through an initial public offering (IPO).
In November 2021, Omnipotent was listed on the PME BSE platform. Its public issue was 30 lakh shares at a price of Rs 63 each, for a total of Rs 18.9 crore. The current price of an Omnipotent share is Rs 50.
The tax administration now wants SEBI to also investigate the company to see if it abused money collected from investors through its IPO, sources said.
“The company was listed last year in November and the possibility of embezzlement, generated by a bogus ITC network, for other financial gain cannot be ruled out,” a tax source said.
Over the past four months, the CGST department has filed over 500 tax evasion cases, arrested 40 people and detected tax evasion to the tune of Rs 4,550 crore. The department has so far collected taxes of over Rs 600 crore.
Most recently, Mumbai’s CGST department recovered over Rs 49 crore from cryptocurrency exchange WazirX in a case of alleged tax evasion.