CGST Mumbai Busted Fake GST ITC Racket Worth Rs.10.10 Crores; One Businessman Arrested

Officers from the Mumbai West CGST Commissionerate of the Mumbai Zone discovered a fraudulent GST Input Tax Credit racket worth Rs10.10 crores. Officers have arrested a businessman who is the Director of M/s Necil Metal Dealers Pvt. Ltd. in Versova, Mumbai, after receiving a tip from the Central Intelligence Unit, Mumbai CGST Zone. The company is GST-registered to trade in ferrous waste and scrap, among other things. It was defrauding the government by claiming and passing Rs 10.10 crores in Input Tax Credit (ITC) without getting the goods or services, in clear violation of the CGST Act 2017.

The Director was detained under Section 69 of the CGST Act 2017 for violating Section 132 of the Act, and he was brought before the Hon’ble Additional Chief Metropolitan Magistrate, Esplanade, Mumbai, today, who remanded him in judicial prison for 14 days until February 2, 2022.

More research is being carried out.

This investigation is part of CGST Mumbai Zone’s larger endeavour to weed out bogus ITC networks that have been fostering unhealthy competition with honest taxpayers and cheating the government of its lawful taxes. In the previous six months, Mumbai West has detected phoney ITC worth Rs.187.20 crores and reclaimed Rs.13.25 crores as part of this massive operation. In the coming days, the department will step up its crackdown on fraudsters and tax evaders, with swift action and zero tolerance for GST evasion and ITC fraud.