CGST Officials Busts Fake GST Invoice Racket worth Rs.74 Crore

The Officers of CGST Bhiwandi Commissionerate have busted a fake GST invoice racket, which was used to pass on fake GST Input Tax Credit (ITC) of around Rs. 14.4 crore on bogus invoices of Rs 74 Crore.

This company’s alleged founder, the owner of Bswar Industries, was arrested on May 24,2022. On July 26, 2022, the second person was arrested who had been involved in opening a current account fraudulently under the name of M/s Bswar Industries while posing as the owner and receiving the proceeds of fictitious transactions totaling Rs. 18 crore.

The anti-evasion division of the CGST Bhiwandi Commissionerate opened an investigation on the company in response to a specific input. Investigation revealed that the claimed business address was fake and that there was no evidence of any commercial activity there. Investigations also turned up evidence that this company had falsely claimed 7.20 crore in input tax credits and transferred 7.20 crore in input tax credits.

Fake invoices totaling almost Rs. 74 crore were issued in flagrant violation of the CGST Act’s 2017 requirements in order to receive and transfer this tax credit without having supplied or received any items. This tax scam is being carried out through a network of over 126 business organisations that are dispersed over several states and cities, including Delhi, Ahmedabad, Rajkot, Mumbai, Thane, and Navi Mumbai.

The accused was held on July 26, 2022, for violating Section 132 of the CGST Act, 2017, based on tangible evidence acquired during the inquiry and his acknowledgment of his involvement in this tax fraud. He was presented before Esplanade’s Honorable Additional Chief Metropolitan Magistrate. He has been committed to judicial custody by the magistrate. The pursuit of additional information and tax recovery measures is ongoing.

This case is a part of the CGST Mumbai Zone’s specific campaign against ITC fraud networks and tax evaders. The CGST Bhiwandi Commissionerate has made 9 arrests in the past 12 months.

To find and track down prospective fraudsters, CGST officials are employing network analysis and data analysis techniques. The CGST officers will step up their campaign against tax cheats in the upcoming days.