CGST Department arrests one person for availing and passing on fake ITC

The CGST, Navi Mumbai arrest the Proprietor/ mastermind handling the business activities of M/s Mass Steel Traders (GSTIN:27BONPS7020E1ZS), M/s S.K. Enterprises (GSTIN:27DBKPK2919Q1Z1), M/s M K Traders (GSTIN:27AOBPK2775F1ZZ) & M/s. Niyaz Enterprises (GSTIN:27CJKPS3682K1ZF) on the charges of availing/ utilizing/ passing on fake Input Tax Credit (ITC) which was received from bogus/ fake entities amounting to Rs 22.38 Crores (Availed Rs.11.19 Crores and passed on Rs.11.19 Crores).

A team of officers from Anti-Evasion, CGST, and C.Ex. Navi Mumbai investigated the aforementioned company. On the basis of fraudulent invoices that were received and forwarded, the aforementioned company claimed and used ITC worth Rs. 11.19 crores that it had obtained from fictitious or false organisations. Without any genuine supply of products or services, there are a total of 125 crores worth of fictitious invoices involved.

According to Section 132(1)(b) & (c) of the CGST Act, 2017, if a taxpayer issues invoices and/or bills without the supply of goods or services or both, resulting in the wrongful availment or utilisation of input tax credit, or utilises input tax credit using such an invoice or bill, the Section 132(1)(i) makes the taxpayer liable for a term of imprisonment that may last up to five years as well as a fine. Additionally, the offences listed above are cognizable and not subject to bail under Section 132(5).

The aforementioned suspect was detained for 14 days in judicial custody after being taken into custody in accordance with Section 69(1) of the Central Goods and Services Act, 2017 for committing offences under Sections 132(1)(b) and (c) of the same Act. On August 18, 2022, the suspect was brought before Judicial Magistrate First Class, Vashi in Belapur.

This case is a component of the Anti-Evasion programme of the CGST, Mumbai Zone against tax cheats and fraudsters who put compliant taxpayers in an unhealthy competitive environment and steal money from the government coffers. The Navi Mumbai Commissionerate recently discovered 500 crore rupees in tax evasion, recovered 20 crores, and detained 17 people as part of this campaign.