CGST Mumbai Busted Fake GST ITC Racket of Rs.10.26 Crores; Proprietor Arrested

CGST Commissionerate in Navi Mumbai discovered a fraudulent Input Tax Credit (ITC) racket worth Rs. 10.26 crores on Tuesday, February 8, and detained the owner of M/s. Al-Marwah Traders. The firm was cheating the government exchequer by obtaining, using, and passing on a false ITC based on bogus invoices totaling more than Rs. 60 crores.

The firm was investigated by a team of officers from the Anti-Evasion, CGST, Navi Mumbai. According to the proprietor’s statement, the company deals in ferrous, aluminum, copper, and other metal scrap.

The investigation found, however, that the taxpayer had obtained and passed on fraudulent ITC from a number of non-existent/bogus companies.

According to Commissioner of CGST and Central Excise, Navi Mumbai, Prabhat Kumar, the accused were arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committing offences under Section 132 (1) (b) and (c) of the said Act and were produced before the Judicial Magistrate First class, Vashi at Belapur on Wednesday and were sent on judicial custody for 14 days.

The case is part of the CGST’s Mumbai Zone’s Anti-Evasion drive, which targets fraudsters and tax evaders who are generating unhealthy competition for complying taxpayers and robbing the government.

As part of this operation, the Navi Mumbai Commissionerate recently discovered tax evasion worth over Rs 450 crore, recovered Rs 20 crore, and arrested 12 people.

To find tax evaders, CGST Mumbai Zone is using data analytics techniques.

In the previous five months, the officers of the CGST Mumbai zone have booked over 625 tax evasion cases, detected tax evasion of Rs. 5500 crore, recovered Rs. 630 crore, and arrested about 50 people utilizing data analysis and network analysis. In the following days and months, the CGST department will increase its fight against fraudsters and tax evaders who are unfairly competing with honest taxpayers and depriving the government exchequer of its lawful money.