CGST Mumbai busted ITC Racket of Rs.5 crores using Bogus Invoices; Mastermind arrested

The proprietor and key personnel in charge of the business operations of six enterprises were detained today by the CGST, Navi Mumbai, on accusations of availing/utilizing/passing on fraudulent Input Tax Credit (ITC) obtained from bogus/fake organisations totaling Rs 5.01 crores.

The total amount of bogus invoices involved is approximately Rs. 30 crores, without actual supply of goods or services. These six firms are M/s Bluesky Trading Company (GSTIN – 27AAHHN6764P1ZA), M/s Scorpion Enterprises, (GSTIN – 27AKUPD0205A2ZR), M/s C A Traders (GSTIN – 27AOKPD3230P1ZS), M/s Amrut Traders Impex (GSTIN – 27AADHA6564L1Z4), M/s Sona Trading Company (GSTIN – AOKPD2878R1Z4) and M/s Shree Satyam Trading Company (GSTIN – 27AELPD5876Q1ZM).

An investigation was launched against the aforementioned businesses by a team of officials from Anti-Evasion, CGST & Central Excise, Navi Mumbai.

These companies obtained and used ITC of Rs. 5.01 crores from fictitious/fake organisations on the basis of fake invoices received and passed on.

According to Sections 132(1)(b) and (c) of the CGST Act, 2017, if a taxpayer issues invoices and/or bills without supplying goods or services or both, resulting in wrongful availment or utilisation of input tax credit, or avails input tax credit using such invoice or bill, the taxpayer is punishable by imprisonment for a term up to five years and a fine.

Furthermore, the offences listed above are cognizable and non-bailable under Section 132(5). The above-mentioned accused was 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 was produced before the Judicial Magistrate First Class, Vashi at Belapur today (25.08.2023) and was placed in judicial custody for 14 days.

This case is part of the Anti-Evasion drive launched by the CGST, Mumbai Zone, against fraudsters and tax evaders who are creating unhealthy competition for compliant taxpayers and defrauding the government exchequer, according to Shri Prabhat Kumar, Commissioner, CGST and Central Excise, Navi Mumbai Commissionerate.