Mumbai: Director of firm arrested for Rs 27 crore input tax credit fraud

Acting on a specific input received from Central Intelligence Unit, CGST Mumbai Zone, the anti-evasion wing of CGST Mumbai South Commissionerate initiated an investigation. It was found that the taxpayer was non-functional at the registered place of business. The director of the company did not join the investigation and was untraceable for the last few months. However, he joined the investigation on August 10 and his statement was recorded wherein he admitted his role in this tax fraud.

A CGST official said: “Investigation revealed that this company had fraudulently claimed input tax credit of Rs 14.15 crore and passed on fake input tax credit of Rs 13.44 crore to various non-existent entities. Bogus invoices of Rs 455 crore were issued for availing and passing on of inadmissible input tax credit, in a fraudulent manner without actual supply or receipt of goods, in gross violation of provisions of the CGST Act, 2017.”

The director was arrested under Section 69 of CGST Act, 2017, for contravention of Section 132 of the CGST Act, 2017. He was produced before a magistrate court and remanded to judicial custody.

During the financial year 2021-22, the CGST Mumbai South Commissionerate detected GST evasion of Rs 949 crore, recovered Rs 18 crore and arrested nine tax evaders, said the official.

This is the sixth arrest by CGST Mumbai South Commissionerate, in the current financial year, the official added.

“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,” added the official.