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GST Mumbai: Officials Bust Rs 185 Crore Fake ITC Racket

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Mumbai: Officers of CGST Mumbai South Commissionerate have busted a fake GST invoice racket, which was used to pass on fake GST Input Tax Credit (ITC) of around Rs. 22 crore on bogus invoices of Rs 185 Crores. The Commissionerate has arrested two persons involved in the tax evasion racket. One of them, is the proprietor of Aditya Enterprises, a Walkasehwar based firm, had lent his identity for creation and use of this firm, in lieu of monetary benefits. The second person is his friend who used to operate this firm for receiving and issuing fake GST invoices.

Acting on a specific input, the anti-evasion wing of CGST Mumbai South Commissionerate initiated an investigation against the firm. During investigation the declared business address was found to be a residential premises with no trace of any business activity. Investigation also revealed that this firm had fraudulently claimed input tax credit of Rs. 11.01 Crore and passed on input tax credit of Rs. 10.96 Crore. Bogus invoices of around Rs. 185 Crore were issued for availing and passing on of this tax credit, without any supply or receipt of goods, in gross violation of provisions of the CGST Act, 2017. A network of more than 250 business entities, which are spread across different states and cities including Delhi, Mumbai, Kanpur, Thane and Navi Mumbai, is involved in this tax fraud. Further investigation and tax recovery action is under progress.

Based on material evidence gathered during the investigation and admission of their role in this tax fraud, both the accused persons were arrested on 22.07.2022 under Section 69 of CGST Act, 2017 for contravention of Section 132 of the CGST Act, 2017. They were produced before the Hon’ble Additional Chief Metropolitan Magistrate, Esplanade. The Magistrate has remanded them to judicial custody for 14 days.

During the financial year 2021-22, the CGST Mumbai South Commissionerate had detected GST evasion of Rs. 949 Crore, recovered Rs. 18 Crore and arrested 9 tax evaders. This is the fifth arrest by the officers of CGST Mumbai South Commissionerate, in the current financial year.

CGST officers are using data analysis and network analysis tools to identify and trace the potential fraudsters. This case is a part of the special drive launched by the CGST Mumbai Zone against the tax fraudsters and fake ITC networks. The CGST officers will intensify this drive against the tax evaders in the coming days.


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TaxGyata Team

TaxGyata Team