Mumbai: Two persons issue bogus invoices to evade GST; arrested

Two persons were arrested for allegedly fraudulently availing Input Tax Credit (ITC) worth several crore rupees. As per the officials from the Mumbai Central CGST Commissionerate, more than 20 fake entities have been used to evade GST through issuance of fake invoices of Rs 585 crore.

The tax evasion network came to fore based on the information that certain firms, dealing in garments, trunks, petroleum oil, etc, were indulging in GST evasion.

The investigation discovered that the said firms illegally availed ITC of Rs 34.38 crore by issuing bogus bills of around Rs 216 crore in the name of shell companies. Another person, who had been operating 14 fake firms, also siphoned off ITC of Rs 40.46 crore.

In this case, bogus bills of around Rs 369 crore were generated. "Both the accused were arrested and produced before the concerned court," apprised the official.

The CGST stated, "The analysis of a WhatsApp group among three people indicated a particular modus operandi where they seem to have agreed that another kingpin will generate bogus invoices and pass on fake ITC without supply of any goods to the owner of fake entities, who will then transfer the amount equal to invoice value."

The transferee would get the money back either through cash or via layers of other accounts. "The deal between these two was to share the profit fraudulently availed in 50:50 ratio. However, one of the arrested persons was acting as a manager, operator and facilitator and was receiving hefty commissions from both," said the agency.