Exporter arrested for availing Fake GST ITC of Rs 15.26 Crore

Officers from Thane CGST Commissionerate of Mumbai Zone apprehended an exporter who is the Director of a Private Limited Company for falsely claiming Rs. 15.26 Crore in GST Input Tax Credit (ITC). This ITC was claimed based on phoney invoices of Rs. 85 Crore issued by the fictitious firms.

An inquiry was launched against M/s. Corvette Tradelink Pvt. Ltd, Borivali, based on inputs received from Delhi Customs and subsequently extended by Officers of Thane Commissionerate. An investigation discovered that this corporation was involved in the export of footwear and had fraudulently obtained GST Input Tax Credit on the basis of phoney invoices produced by non-existent fictitious entities from Delhi. The Company had utilised this forged ITC to pay IGST for exports through ICD Tughlakabad in Delhi, and had later claimed an IGST refund from Indian Customs on the forged ITC.

On 03.03.2022, one Director of the abovementioned Private Limited Company was arrested under Section 69 of the CGST Act 2017 for violating Sections 132(b) and 132(c) of the CGST Act 2017 and produced before the Chief Metropolitan Magistrate, Mumbai. The magistrate ordered the accused to be held in judicial detention for 14 days. If found guilty, he faces up to 5 years in prison and a fine.

This case is part of the CGST, Mumbai Zone’s Anti-Evasion drive against tax evaders and fraudsters. CGST Thane Commissionerate has identified Rs. 1238 crore in tax evasion, recovered Rs. 20 crore, and arrested 7 people in the last six months.

To identify possible tax evaders and fraudsters, the CGST department employs data mining, data analysis, and network analysis techniques. The department is focusing on all areas of the economy, including the service sector, exports, imports, and the digital economy, in order to detect tax evaders who are unfairly competing with honest and compliant tax payers. In the next days and months, the department will step up its anti-evasion efforts.