CGST seeks cancellation of bail of Shemaroo honchos in ITC fraud

4 firms worth `140cr created in names of ex employees; Atul Maru, Hiren Gada, Amit Haria were arrested last year

The department of Central Goods and Services Tax (CGST) has accused Shemaroo Entertainment Pvt Ltd and its office bearers – Joint MD Atul Maru, CEO and director Hiren Gada and CFO Amit Haria – of alleged evasion of GST to the tune of Rs133.6 crore through 20 bogus firms and filed a prosecution complaint.

Maru, Gada and Haria were arrested on September 6, 2023 for the alleged fraud. They were granted bail on the next day by a magistrate’s court. The department has moved the sessions court for cancellation of their bail, which is pending for hearing. The agency has alleged that the three are the masterminds of the alleged fraud causing loss to the government.

The department said in its complaint, “Investigation conducted so far indicates that the accused have been actively involved in establishing and managing fraudulent business entities and indulged in availment and utilisation of ineligible input tax credit (ITC) to the tune of Rs133.6 crore. The accused have also availed ITC from non-existent suppliers whose registrations were cancelled suo-moto / ab-initio, thereby causing loss of revenue to the government exchequer.”

The department has further said that Shemaroo Entertainment Ltd has committed the offences both as recipient and suppliers, as invoices charging GST were received and issued showing taxable supply.

As per the department, Shemaroo Entertainment Ltd availed ITC amounting to Rs70.25 crore and Rs63.34 crore on the strength of invoices raised by 20 bogus firms without any supply of goods and services.

The agency claimed that the firms namely M/s Uttam Movies, M/s Mangal Entertainment, M/s JDS Motion Pictures and M/s JVS Media Solutions are registered with the GST department at the same address at Andheri (East).

It also claimed that the four firms had business of more than Rs140 crore with few companies, which the agency began scrutinising and found that the firms were owned by former employees of Shemaroo – Jhaverchand Soni and Vijay Vira.

During the probe, Maru admitted that he, Gada and Haria were responsible for creating multiple dummy firms in the name of Soni and Vira on paper only to avail and use ITC without supply of any goods and services.

The agency further claimed that Soni and Vira were lured into creating fake firms for the ultimate benefit of Shemaroo. The two employees managed to establish multi-crore businesses within a short span of time without the requisite expertise or capital. The agency added that the two had not submitted any details of the firms, which indicated that the firms never really existed.

Alleged evasion of GST to the tune of `133.6 cr

Invoices raised by 20 bogus firms without any supply of goods and services

Four firms owned by former employees of Shemaroo – Jhaverchand Soni and Vijay Vira