Is Vinay Kumar Rao IIT Accused of Tax Evasion?

Vinay Kumar Rao IIT
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An alleged Rs 14 crore GST fraud has led to the arrest of Vinay Kumar Rao IIT.
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Vinay Kumar Rao IIT

The idea of integrated coaching was introduced in Mumbai by Vinay Kumar Rao IIT, the managing director and CEO of Rao IIT Academy, creating a new coaching culture. By starting online lectures on YouTube in 2014, he was a pioneer in the field and one of the first. In addition to effectively expanding his institute to additional locations including Delhi, Pune, Lucknow, Patna, and more, Vinay Kumar Rao IIT attained a dominant position in Mumbai.

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CGST detains the director, Vinay Kumar Rao IIT

The director of the Rao IIT Academy has been detained by central GST officers for stealing Rs 14 crore worth of tuition fees from institutions and coaching programs. The academy is the same one whose Sion-based college recently lost its accreditation from the state department of education because it operated a “ghost” institution. Since November 2020, mid-day has revealed that while colleges appear to exist on paper, they do not.

Since reportedly enrolling students in its integrated universities without providing them with any education either on campus or in coaching lessons, The Academy has come under fire. The directors obtained anticipatory bail in this case after the parents contacted the police.

Officials with the CGST had launched a parallel inquiry into possible tax cheating by the academy. The officials of Division VIII, Mumbai East CGST Commissionerate, acting on specific intelligence, have discovered a new method of tax evasion. Rao Edusolutions Pvt Ltd, doing business as Rao IIT Academy, is allegedly suspected of collecting GST at 18% on tuition fees from its pupils while misrepresenting those amounts as unrelated and exempt services in the returns submitted to the department.

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On March 24, 2023, authorities had closed the academy’s administrative headquarters in Sakinaka. Following the raid, the CGST detained Vinay Kumar Rao IIT, the company’s director, in accordance with the necessary provisions of the CGST Act, 2017. An Additional Metropolitan Magistrate remanded him to court prison for a total of 13 days on Friday. After a restaurant was discovered at the institute’s registered address, the State Education Department also decertified Sion College.

Rao IIT Academy’s test preparation company receives $8.6 million in structured debt from Avendus

Rao Edusolutions Pvt. Ltd., a provider of educational coaching services that does business as Rao IIT Academy, has raised structured financing from Avendus Finance, the credit solutions division of Avendus Capital, in the amount of Rs 55 crore ($8.6 million).

According to a statement from Avendus Finance, Rao Edusolutions will use the financing to expand its coaching services company and refinance current loans.

Rao Edusolutions, a 2013 incorporation, runs a network of coaching facilities for students aspiring to attend IITs and medical schools. With more than 5,500 students, the organization has a network of 27 centers across the states of Maharashtra, Delhi, Gujarat, and Rajasthan.

Rao Edusolutions promoter and CEO Vinay Kumar Rao IIT remarked, “Avendus Group has emerged as a partner, providing constant guidance and support.”

“Kumar has proven his capacity to expand the educational coaching industry. We are confident in assisting the company in achieving the same goals thanks to his well-planned approach to future expansion, according to Sandeep Thapliyal, managing director and chief executive officer of Avendus Finance.

According to VCCEdge, the data research platform of News, Rao Edusolutions’ net sales in FY2016–17 were Rs 57.4 crore, while its profit after tax was Rs 3.2 crore.

In November 2016, Avendus Finance, a division of Avendus Capital, was established. It is an expert in offering tailored structured lending solutions.

proprietors of the Krishna Institute of Medical Sciences Ltd., a chain of hospitals with locations in Hyderabad, received Rs 60 crore ($9.2 million) from Avendus Finance in November 2017.

The director of the Rao IIT Academy was arrested for “Rs 14 crore GST fraud.”

An alleged Rs 14 crore GST fraud has led to the arrest of a Rao IIT Academy director. The Central GST Department asserted that while declaring unrelated and exempt services in the returns submitted to the department, the institute had collected GST at 18% on tuition fees from students.

According to the statement, the tuition funds thusly received are thought to have been misappropriated in the company’s favor.

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According to a press release from the GST department, the officials of Division-VIII, Mumbai East CGST Commissionerate have discovered a new method of tax evasion in the coaching industry after acting on particular intelligence.

The company’s Mumbai corporate office’s office number was called by TOI, but no one answered. Additionally, TOI emailed the business to request a statement, but as of the time of publication, there had been no reply.

Further allegations state that Rao Edusolutions Pvt Ltd, a private limited firm that conducts business as Rao IIT Academy, is accused of charging tuition fees with GST at a rate of 18%. According to the press release, one of the company’s two directors was detained under Section 69 of the CGST Act for violating Section 132(1)(d). Since the alleged evasion is over Rs 14 crore, there is no possibility of a plea bargain. The defendant was kept in judicial custody.

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The coaching class director informs Bombay HC that she is prepared to reimburse students’ payments.

The director of a coaching center has informed the Bombay High Court that he is prepared to reimburse students’ tuition who have complained about the situation to Thane’s Naupada police station.

According to Justice Bharati Dangre’s judgment from October 20, “let the exercise be carried out by the investigating officer by sending notification to the victims whose statements are recorded, to approach the applicant within two weeks from today.”

Vinay Kumar Rao IIT, the director of Rao IIT Academy, asked for pre-arrest release, which the court heard.

On March 11, he was arrested for criminal breach of trust and cheating, along with chairman B V Rao and another director, Yamini Rao. The institute offers JEE Main and Advanced course instruction.

The son of the complainant Amruth Desai enrolled in the two-year JEE Advanced program in 2019 and paid tuition of Rs 2.5 lakh. After a few months, lectures ceased to be held or were postponed, and teachers lamented not being paid. Parents were given assurances by the administration that the problem would be resolved, yet nothing changed. Desai had his son admitted to a different facility, but no refund was given. B V Rao and Yamini Rao received pre-arrest bail on April 1 from the Thane Sessions Court, but Vinay Kumar Rao IIT‘s motion was denied because the majority of the accusations were against him.

On April 13, Vinay Kumar Rao IIT consented to refund Rs. 1.03 lakh, subject to receiving a no-dues certificate, it was informed to HC. He was then given a temporary pre-arrest bail by the HC. The dispute was resolved with Desai, according to Vinay Kumar Rao IIT‘s attorney Ayush Pasbola, who presented the consent terms on October 20. Desai’s lawyer stated that he had received the whole sum and said he had no complaints if Vinay Kumar Rao IIT was granted bail.

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But the prosecutor, Hitendra Dedhia, reminded the court that in addition to Desai, the FIR also listed the names of nine other parents who had paid the tuition for their kids, but whose kids had to drop out of school and enroll somewhere else since the resources they needed were not provided. According to him, the complaint’s overall value exceeds Rs 23 lakh.

According to Pasbola, Vinay Kumar Rao IIT is willing to reimburse the money to each student after verifying the amount. Justice Dangre then ordered the investigating officer to “inform the victims about the statement made by the advocate on behalf of the academy” in response to this. The judge extended Vinay Kumar Rao IIT‘s temporary protection until November 24.

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IIT Coaching Institution Director Arrested by GST Department for Rs 14 Crore GST Misappropriation

Central GST officials have detained Vinay Kumar Rao IIT, the director of the Rao IIT Academy, on suspicion of embezzling Rs 14 crore in tuition fees from coaching programs and colleges. The academy has recently come under scrutiny following the state education department’s de-recognition of one of its institutions for being a non-existent college. Parents have accused the academy of enrolling pupils in integrated colleges without offering any instruction after this occurrence sparked questions about the organization’s other institutions.

The directors of the academy were successful in obtaining anticipatory bail when the parents contacted the police. The academy is being looked into for potential tax evasion by Central Goods and Services Tax inspectors. Investigators found that Rao Edusolutions Pvt Ltd, which conducts business as Rao IIT Academy, reportedly collected GST at a rate of 18% on tuition fees while misrepresenting such payments as unrelated and exempt services.

The Central Goods and Services Tax Act, 2017, Section 132 (1)(d) violation led to the arrest, which was made according to Section 69 of the same Act. On March 24, 2023, authorities detained Vinay Kumar Rao IIT by the applicable provisions of the Central Goods and Services Tax Act, 2017. They also sealed the academy’s Sakinaka administrative office. For the non-bailable offense that he is accused of, the accused has been sent to judicial detention.

Is Vinay Kumar Rao IIT Accused of Tax Evasion?
Is Vinay Kumar Rao IIT Accused of Tax Evasion?

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