CGST Official busts fake GST Input Tax Credit Racket

The CGST Officers from Navi Mumbai busted a fake GST Input Tax Credit Racket.

A key individual in charge of managing the operations of M/s Storage Miles (GSTIN: 27BCQPG7380A1ZJ) and M/s Catbus (GSTIN: 27AZIPP2044A1ZP) was detained by CGST, Navi Mumbai, on November 17th 2022 on suspicion of receiving, using, and passing on fictitious Input Tax Credits (ITCs) worth Rs 20.96 Crores from fictitious/fake entities (Availed Rs 10.48 crores and passed on Rs. 10.48 crores). An accomplice of the aforementioned person, the proprietor/operator, was already detained on November 16, 2022.

Following the arrest of the owner/operator of the aforementioned businesses, the team of officers from Anti-Evasion, CGST, and C.Ex. Navi Mumbai After locating the second suspect utilising appropriate surveillance, authorities obtained the necessary information and made an arrest. As previously stated, the aforementioned businesses have taken advantage of and used ITC worth Rs. 10.48 crores that they obtained from fictitious or phoney corporations thanks to bogus invoices that were sent to them and then received back. 117 crores worth of fictitious invoices totaling no genuine provision of goods or services are involved.

As per the provisions of Section 132(1) (b) & (c) read with Section 132(1) (l) of the CGST Act, 2017, if taxpayer issues invoices and/or bills without supply of goods or services or both leading to wrongful availment or utilization of input tax credit, or avails input tax credit using such invoice or bill as well as attempts to commit or abet the commission of any offence stated above, the Section 132(1)(i) renders the taxpayer punishable with imprisonment for a term which may extend to five years and with fine. Further, as per Section 132(5) offences specified supra are cognizable and non-bailable.

The second accused was detained under Section 69 (1) of the Central Goods and Services Act, 2017 for violating Section 132 (1)(b) and (c) of the same Act. On November 17, 2022, the second accused was brought before Judicial Magistrate First Class, Vashi in Belapur and was placed in judicial custody for 14 days.