The department of Central Goods and Services Tax (CGST) has accused Shemaroo Entertainment Pvt. Ltd. and its bosses and top employees of alleged evasion of GST to the tune of Rs. 133.60 crore through 20 bogus companies and filed a prosecution complaint. Joint managing director Atul Maru, CEO and director Hiren Gada and CFO Amit Haria were arrested on September 6, 2023 for the alleged fraud. They were granted bail the next day by a magistrate’s court.
The department has now moved the sessions court for cancellation of their bail which is pending for hearing. The CGST department has alleged that Atul Maru, Hiren Gada and Amit Haria are the masterminds of the alleged fraud which caused loss to the government.
In its complaint, the department said, “Investigations conducted so far indicate 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 Rs. 133.60 crore. The accused have also availed ITC from non-existent suppliers whose registrations were cancelled suo moto or ab initio, thereby causing loss of revenue to the government exchequer.” The department has further said that Shemaroo committed the offences as both, recipients and suppliers.
As per the department, Shemaroo availed ITC amounting to Rs. 70.25 crore and Rs. 63.34 crore on the strength of invoices raised by 20 bogus firms without any supply of goods or services. Four of these bogus firms were owned by former employees of Shemaroo viz. Jhaverchand Soni and Vijay Vira, the department claimed.
During the probe, joint managing director Atul Maru admitted that he, Gada and Haria were responsible for creating multiple dummy firms in the name of Soni and Vira on paper to avail and use ITC without supply of goods and services.
In his statement, Atul Maru admitted that he and others entered into transactions through fake companies to inflate their turnover so that they could get bank loans at lower interest rates. He said, the company had not evaded any tax.