South Mumbai CGST officials bust fake GST invoice racket, 2 held

The Commissionerate also arrested two persons involved in the tax evasion racket.

One of the arrested is the proprietor of Aditya Enterprises, a Walkeshwar-based firm in south Mumbai. He 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, said a PIB press release.

Acting on a specific input, the Anti-Evasion wing of CGST Mumbai South Commissionerate initiated an investigation against the firm.

The declared business address during investigation was found to be residential premises with no trace of any business activity.

The 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 over 250 business entities spread across different states and cities, including Delhi, Mumbai, Kanpur, Thane and Navi Mumbai, is involved in this tax fraud.

The release said 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 accused were arrested on July 22 under Section 69 of CGST Act, 2017, for contravention of Section 132 of the CGST Act, 2017. They were produced before the Additional Chief Metropolitan Magistrate, Esplanade, and were sent to 14 days judicial custody

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 nine tax evaders.

This is the fifth arrest by the officers of CGST Mumbai South Commissionerate in the current financial year.