Surat Textile Trader Arrested in Major GST Fraud Probe

Authorities have apprehended a Surat-based textile trader in connection with an extensive Goods and Services Tax (GST) evasion scheme. The Directorate General of GST Intelligence (DGGI) announced the arrest of Yatin Dudhat, who operates Dudhat International in Surat, for allegedly creating fictitious invoices totalling Rs 100 crore. These fraudulent documents were reportedly used to illicitly claim Input Tax Credit (ITC) amounting to Rs 15.19 crore. Investigations by DGGI officials indicate that Dudhat obtained these fabricated invoices from various businesses without any legitimate transfer of goods. This tactic was seemingly employed to improperly secure tax credits. Prior to the arrest, DGGI personnel conducted searches at Dudhat's office and business locations, where they confiscated numerous documents pointing to his involvement. Officials have stated that these activities contravene Section 132 of the CGST Act, 2017, which addresses tax evasion and fraudulent claims. This recent arrest is part of a larger ongoing inquiry that commenced with the detention of Chetan Patoliya, the proprietor of Kunj Fashion, another Surat textile enterprise. Patoliya was found to have unlawfully claimed approximately Rs 12 crore in ITC through the use of counterfeit sales and purchase invoices. During questioning, Patoliya reportedly disclosed that he facilitated the transfer of fraudulent ITC to several other companies, including Infinity Impex, Salton Impex, Manya Overseas, and Shreeji Exports, none of which received any actual goods. Following his arrest, Dudhat appeared before Chief Judicial Magistrate R.M. Kalotara on Saturday and was subsequently ordered into 14 days of judicial custody at Surat Central Jail. The DGGI’s investigation continues as officials work to identify and trace the complete network of businesses that benefited from the illicit ITC passed through Dudhat International and Kunj Fashion. Authorities have indicated that additional arrests could occur as the probe intensifies.