CGST Commissionerate Arrests Businessman Involved in Passing of Fake ITC and Bogus Billing

Officers from the Bhiwandi Commissionerate of the CGST Mumbai Zone apprehended a businessman involved in the Fake Input Tax Credit racket. Intelligence was created by anti-evasion, Bhiwandi CGST of Mumbai CGST Zone, with the help of various data analytics tools such as Advait, E-way Bill Portal, and others. During the investigation, it was discovered that the businessman opened two firms in his name, through which he obtained and used a total of Rs 20.44 Cr in ITC. So far, preliminary investigations have revealed GST evasion of Rs 5.74 crores due to the incorrect use of fake ITC without receipt of goods totaling Rs 32.5 crores.

The search was conducted at the residence of a tax-payer who was engaged in bogus billing and availment, as well as the passing on of bogus ITC, thereby defrauding the government exchequer of its rightful GST revenue. The initial investigation revealed that the company had fraudulently claimed Rs. 5.74 crores in Input Tax Credit (ITC) without actually receiving goods from non-existent/false suppliers. He is the owner of two companies, M/s N. S. Pharma Chem and M/s Neon Pharma Chem. The taxpayer has not provided any documentation in support of the ITC claim and transfer. He was arrested on March 9, 2022, under Section 69 of the CGST Act, 2017, and appeared today before the Hon’ble Additional Chief Metropolitan Magistrate, Fort, Mumbai. The accused has been remanded in judicial custody for 14 days, until March 22, 2022.

This operation is part of CGST Mumbai Zone’s efforts to eradicate fake ITC networks that have been contaminating the country’s healthy economic ecosystem and defrauding the Government Exchequer. Bhiwandi Commissionerate has made seven arrests in the last six months. In the coming months, the department will step up its crackdown on fake ITC networks and other GST evaders.