CGST Busted Racket of Fake GST ITC of Rs.81 Crores

The CGST Commissionerate in Belapur has busted a Rs. 81 crore bogus GST Input Tax Credit scheme. The firm’s director was arrested.

CGST Commissionerate, Belapur arrested one of the Directors of M/s. Fantasia Trade Pvt. Ltd., Navi Mumbai as part of a special Anti-Evasion drive undertaken by CGST Mumbai Zone for availing and passing on inadmissible fraudulent Input Tax Credit of Rs.81 Crore by utilising bogus invoices of Rs.479 Crore.

Searches were undertaken at several sites, including the firm’s business premises and the premises of its carrier, based on the intelligence derived from the use of Data Analytics tools. During the searches, certain damning documents were uncovered and seized.

An investigation indicated that M/s. Fantasia Trade Pvt. Ltd. was working on behalf of M/s. Arch Pharmalabs Ltd., Mumbai, and that no traded products were moved.

Based on the material evidence gathered during the investigation, it was clear that a prima facie offence as defined in Section 132 of the Central Goods and Services Tax Act, 2017, was being committed with complete disregard for the statutory provisions, with the intent to defraud the government of its due revenue.

The investigation showed a cognizable and non-bailable offence of availing and utilising ineligible Input Tax Credit in the amount of Rs.81 Crore. As a result, the Director of M/s. Fantasia Trade Pvt. Ltd was detained on 18.02.2022 and placed before the magistrate on the same day, who remanded him to judicial detention for 14 days by invoking the power under Section 69 of the CGST Act.

This action is part of CGST Mumbai Zone’s efforts to remove phoney ITC networks that have been contaminating the country’s healthy economic ecology and cheating the Government Exchequer. To identify tax evaders, the CGST department employs data analytics and network analysis techniques. In the recent six months, the CGST Mumbai Zone has booked over 730 cases of tax evasion, detected tax evasion of Rs. 6380 Crore, recovered around Rs. 700 Crore, and arrested 56 people as part of a special effort. In the following days and months, the Department will step up its efforts to catch fraudsters and tax evaders.