Alleged mastermind behind 212 shell companies nabbed

Sushant Ranjan
Saturday, 4 August 2018

Intelligence collected by the DGGI, Pune Zonal Unit, indicated that ACI holding service tax registration is a shell company, which is raising tax invoices charging service tax without providing any service. 

Pune: The Directorate General of GST Intelligence (DGGI), Pune Zonal Unit, has arrested Shirish Shah (50) of Mumbai, who is allegedly the manager, operator and controller of over 200 shell companies.

In case of only one of these 212 companies, M/S Allied Computers International (Asia) Ltd (ACI) has issued fake invoices amounting to Rs 70 crore and Rs 7.30 crore collected as service tax, which has not been paid to the government, according to DGGI.

Intelligence collected by the DGGI, Pune Zonal Unit, indicated that ACI holding service tax registration is a shell company, which is raising tax invoices charging service tax without providing any service. Moreover, these invoices are further being used by big companies viz M/S DesignTech Systems Ltd (DesignTech) and M/S Skillar Enterprise India Private Ltd, New Delhi (Skillar) for taking input credit.

“These big companies are part of a tripartite agreement entered in 2015 between Andhra Pradesh State Skill Development Corporation (APSSDC), M/S DesignTech and M/S Siemens Industry Software India Ltd (Siemens) for setting up and operating skill development centres in Andhra Pradesh. It is astonishing to reveal that government contracts are subcontracted to companies such as ACI which do not exist,” the DGGI said in a statement.

Under the said contract, funds of over Rs 300 crore was received in advance by DesignTech and subsequently over Rs 200 crore was transferred to Skillar by DesignTech.

Alleged mastermind behind 212 shell companies held

Of these, Skillar misutilised invoices raised by ACI charging service tax amount for routing public funds in an illegitimate manner. All these appear to have been done by three other players in the fraud under the guidance and influence of Shirish Shah, who revealed the complete money trail, claimed the DGGI.

Investigations by DGGI revealed M/S ACI is a shell company with no office and operated by Shah from one of his office premises situated at Dhobi Talao Road, Mumbai. He allegedly has entire control over issuing tax invoices charging service tax without providing any service amount received against the said invoices was also found deposited in the bank account of ACI from the respective companies. Shirish Shah allegedly accepted that these kinds of arrangements are only made to the routing of funds through a layering of various existing/non-existing companies.

The investigation was carried out by Ajitkumar Karthikeyan, Senior Intelligence Officer, Ajit Limaye and Kundan Pratap, Intelligence Officers of DGGI under the guidance of Vaishali Patange, Deputy Director, DGGI, Pune Zonal Unit.

The mandate of DGGI is to nab economic offenders involved in evasion of GST, central excise duty, service tax and customs duty. The enforcement actions by DGGI officers protect the law-abiding citizens who bear the burden of the tax.

The DGGI said it welcomes everyone who provides information about evasion of indirect taxes, viz GST, central excise duty, service tax and customs duty. Pune Zonal Unit of DGGI may be contacted at pzu-dggsti@gov.in

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