CGST officials busts Fake GST Invoice Racket of Rs.817 Crore; One person arrested

Officers of CGST Belapur Commissionerate of Mumbai Zone have busted a fake GST invoice racket, which was used to avail fake GST Input Tax Credit (ITC) of around Rs. 147 crore, on bogus invoices of Rs.817 Crores and have arrested the de facto director/ Mastermind of M/s Dhruvika Chemicals Trading Pvt. Ltd., M/s Nicolasa Trading Pvt. Ltd., M/s J B Dyechem Pvt. Ltd etc.

An investigation was launched against the aforementioned group, alleging that they engaged in the receipt and issuance of only invoices without actual purchase and sale / supply of the goods, thereby availing and passing on ineligible GST Input Tax Credit, within the fictitious companies established for the purpose of inflating turnover and obtaining bank loans. Searches were carried out, and it was discovered that the entities established were either non-functional or non-existent in the appropriate locations.

Investigation discovered that this group of enterprises produced fictitious invoices totaling Rs.817 crores, illegally claimed/availed input tax credit totaling Rs.147 crores, and passed on identical Fake input tax credit amongst themselves or to numerous non-existent entities. It also indicates that they misused around Rs.127 crores in bank loans by using the aforementioned method.

Based on material evidence acquired throughout the investigation, statements given, and facts on record, the de facto Director was detained on 18/08/2023 under Section 69 of the CGST Act, 2017 for violating Section 132 of the CGST Act, 2017. On 18/8/2023, he appeared before the Honb’le JMFC court in Belapur and was remanded to judicial prison for 14 days, or until 31/08/2023.

During the financial year 2022-23, the CGST Belapur Commissionerate discovered Rs.628 crores in GST evasion, recovered/ reversed Rs. 270 crores, and arrested three tax evaders. Data analysis technologies are being used by CGST officials to detect and track down suspected fraudsters. This case is part of the CGST Mumbai Zone’s particular campaign against tax evaders and bogus ITC networks.