Accountant Arrested by GST Department for GST Fraud of Rs. 181 Cr using Bogus Bills Rs. 1000 Cr

An accountant has been arrested by the CGST Palghar Commissionerate for issuing false bills totaling more than Rs.1000 crore and perpetrating a Rs.181 crore GST Input Tax Credit (ITC) fraud.

Data mining and data analysis revealed that one business, M/s Nithilan Enterprises, is accused of obtaining and passing on fraudulent Input Tax Credit (ITC) by generating fake invoices without actual receipt or supply of goods or services. Based on this, they conducted extensive investigations and discovered that a 27-year-old guy, who studied until the 12th grade and now works as a freelance accountant and GST consultant, defrauded and stole the identity of one of his clients in order to commit GST frauds for monetary gain.

When confronted with substantial proof, the accountant admitted to issuing false bills totaling more than Rs.1000 crores and obtaining and passing fake ITC totaling Rs.181 crores without any goods movement. His confession and evidence gathered throughout the inquiry led to his arrest on Tuesday, January 25, 2022, by CGST authorities under Section 69 of the CGST Act 2017 for offences punishable under Section 132 of the CGST Act 2017. On the same day, the accused appeared before the Additional Chief Metropolitan Magistrate in Mumbai. He has been remanded in judicial custody for 14 days by the Hon’ble Court. If convicted, the defendant might spend up to five years in prison and pay a fine.

He is accused of being a part of a larger network that entices people to apply for GST registrations and then steals their information. Without actually supplying or receiving goods or services, this stolen identity is utilised to generate, obtain, and pass on false ITC. The kingpin, as well as other participants and beneficiaries of this network, are being tracked down.

This case of bogus ITC racket identification is part of the CGST Mumbai Zone’s anti-evasion battle against fraudsters and tax evaders who have been unfairly competing with honest and compliant taxpayers and looting the government exchequer. Palghar Commissionerate has so far discovered Rs.460 crore in tax fraud, collected Rs.12 crore, and arrested two people as part of this drive. In the following days, the CGST Department would tighten its crackdown on tax cheats and evaders.