Input tax credit fraud worth Rs 34 crore is discovered by GST authorities

The officers of the Anti Evasion branch of the Central Goods and Service Tax (CGST) Commissionerate, Delhi (East), have unearthed a case of inadmissible input tax credit (ITC) availment/utilization and passing on through bogus GST invoices without actual movement of goods worth Rs 34 crore based on specific intelligence (approx).

The seven companies were formed with the intent of generating bogus GST invoices in order to pass on fraudulent ITC without actually moving goods or paying actual GST to the government. These companies produced items worth Rs. 220 crore (approx.) less GST invoices and passed inadmissible ITC worth Rs. 34 crore (approx.). Sh. Rishabh Jain was the mastermind behind the phoney firms and bogus GST invoicing scheme.

The strategy entailed forming many companies with the goal of obtaining, utilising, and passing on inadmissible credit. M/s Blue Ocean, M/s Highjack Marketing, M/s Kannha Enterprises, M/s S S Traders, M/s Evernest Enterprises, M/s Gyan Overseas, and M/s Viharsh Exporters Pvt. Ltd. are among the companies involved in this network.

Sh. Rishabh Jain voluntarily admitted his guilt in a statement. He stated that the business premises were shut by bankers due to non-payment of an overdraft account with the Central Bank of India. Following that, he began issuing fake GST invoices without any actual movement of items.

Sh. Rishabh Jain willfully committed offences under Section 132(1)(b) of the CGST Act, 2017 that are cognizable and non-bailable under Section 132(5) and punished under clause I of sub section (1) of Section 132 of the Act ibid. As a result, Sh. Rishabh Jain was detained on 13.11.2021 under Section 132 of the CGST Act and remanded in judicial detention by the duty Metropolitan Magistrate until November 26, 2021.

More research is being carried out.