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GST Mumbai: Officials arrest proprietor for ITC fraud of Rs 6.46 crores

The anti-evasion team of CGST & Central Excise, Mumbai conducts searches on 24.09.2021 at the office and godown of M/s SR Enterprises. CGST officials arrested the firm's proprietor for fraudulent availment of Input Tax Credit (ITC) of Rs 6.46 crores.

Read Press Release Here:

An arrest was made by the officers of CGST & Central Excise, Mumbai Central Commissionerate in an ongoing investigation involving receipt and supply of ineligible Input Tax Credit amounting to Rs. 6.46 Crores. The availment was made by M/s S.R. Enterprises against fake invoices issued by various Non-Existing/ Fake/ Fictitious firms without actual receipt of goods. This quantum is likely to go up after further investigation. The investigation was carried out by acting upon specific intelligence developed locally and supported thoroughly by data based analysis.

Investigation appears to show that this firm availed the ineligible Input Tax Credit (ITC) against fake invoices (where no supplies from any suppliers have been physically received) and passed on the same to other buyers. This fraudulent activity is causing a severe loss of revenue to exchequer.

In this connection, search/ inspection was conducted by the Anti-evasion team of CGST & Central Excise, Mumbai Central Commissionerate at the office and godown of proprietor and after detailed questioning, one person who is proprietor of the firm was arrested on 24/09/2021 under section 69 of CGST Act, 2017 and relevant provisions of CrPC for availing ineligible ITC amount of Rs. 6.46 Crores and was produced before the Hon’ble Additional Chief Metropolitan Magistrate, Fort, Mumbai.

The Hon’ble court was sent the accused to 14 days judicial custody. Further Investigation in the matter to identify other scamsters involved in the tax fraud is under process. This is the second arrest by CGST & Central Excise, Mumbai Central Commissionerate in last 2 days.

The department has launched a drive against fake invoice racketeers who try to defraud government exchequer and lead to unhealthy competition with honest taxpayers. This is a step to highlight the department’s commitment and support to honest taxpayers.


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TaxGyata Team

TaxGyata Team