CGST Officials Busted GST ITC Racket of Rs.396.84 Crore; Director Arrested

The Officers from the Mumbai West CGST Commissionerate of the Mumbai Zone busted a bogus GST Input Tax Credit (ITC) fraud and arrested the director of a private limited firm. An investigation was launched against Andheri-based company M/s Hritik Chemicals Pvt. Ltd., which deals in the trading of Hydrocarbons and Organic Chemicals, based on a tip-off received from the Central Intelligence Unit of CGST Mumbai Zone.

Investigation revealed that this company was involved in fraudulent availment and passing of Input Tax Credit (ITC) of Rs.16.32 Crore without receiving or supply of the goods, in gross violation of the provisions of CGST Act, 2017.

The Director of the company was arrested under Section 69 of CGST Act, 2017 for contravention of Section 132 of CGST Act, 2017 and produced before the Hon’ble Additional Chief Metropolitan Magistrate, Esplanade, Mumbai on 10th March 2022. The Magistrate has remanded him to 14 days’ judicial custody till 23rd March, 2022. Further investigation is under progress.

This operation is as part of CGST Mumbai Zone’s efforts to stamp out fake ITC networks and tax evaders, which have been causing unhealthy competition with honest taxpayers and defrauding the Government Exchequer. Through such efforts CGST, Mumbai West Commissionerate has unearthed fake ITC amounting to Rs.396.84 Crore, recovered Rs.28.65 Crore and arrested four persons in the last six months.

The CGST officers are using data analysis and network analysis tools to identify potential fraudsters. The Department is going to intensify the drive against tax evaders in the days to come with prompt action and zero tolerance for GST evasion and ITC frauds.