CGST Mumbai South Smashes a Network of Fictitious Firms Which Generated Fake Input Tax Credit of Rs 49 Crores

Officers from the CGST Mumbai South dismantled a network of bogus organizations that submitted phoney Bullion bills for Rs. 1650 crores and fake Input Tax Credit (ITC) worth Rs. 49.7 crores, and were remanded in judicial custody by the Additional CMM Court in Mumbai.

M/s Karnataka Jewellers, M/s Balaji Enterprises, and M/s Kismat Enterprises were among the bogus companies founded by the detained person. These three businesses had together obtained and passed on a bogus ITC worth Rs. 29.4 crores to Gajamukhi Bullion, which then passed on a portion of this fraudulent ITC worth Rs. 20.27 crores to M/s Golden Bullion, despite no actual movement of goods or services. M/s. Golden Bullion’s owner had previously been detained, according to Additional Commissioner, Mumbai South Shi Rajiv Shankar.

Detailed investigations revealed that the accused person was setting up phoney businesses for monetary benefit in cities like as Mumbai, Belgaum, and Bikaner. He was arrested under Section 69 of the CGST Act for violations under Sections 132(1)(b), 132(1)(c) read with Section 132(5) of the CGST Act based on material evidence and his confession. On 03.02.2022, he appeared before the Additional CMM court in Mumbai. He was sentenced to 14 days in judicial custody. There are currently efforts underway to capture other members of this network.

This case is part of the CGST’s Mumbai Zone’s anti-evasion campaign against tax evaders. CGST Mumbai South Commissionerate has uncovered tax evasion of Rs 570 crores, recovered Rs 7 crores, and arrested seven people as part of its drive during the last five months.

To detect possible tax evaders, the CGST department is using data analysis and network analysis techniques, as well as working with other tax agencies. In the next days and months, the department will step up its anti-evasion efforts.