Delhi CGST Arrests Company Director Over Fraudulent GST Credit Claims Exceeding Rs 8 Crore

A big fraud has come to light in the actions of the GST department in Delhi. The anti-evasion team of the Central GST (CGST) Delhi South Commissionerate has arrested the director of a company for taking fake input tax credit (ITC) of more than Rs 8 crore in violation of Section 16 of the CGST Act, 2017.

During the investigation, it was revealed that the company was availing the benefits of ITC without actual buying and selling. The suppliers on the basis of which this credit was taken were either already suspended or had cancelled their own registration, or the department had cancelled their registration. When officials investigated the supply chain in depth, it was also revealed that no goods were actually purchased at any stage, thereby proving the entire ITC claim false.

Additionally, the company passed on this fake ITC to its customers even though there was no genuine transaction behind it. The statement of the director of the company was recorded under section 70 of the CGST Act, 2017, in which he admitted that all the transactions of the company were under his control on April 16, 2026. However, he could not present any concrete documents to prove his claims true.

Considering the seriousness of the case, it was considered a non-bailable and cognizable offence under Section 132 of the CGST Act; the director was arrested under Section 69(1) of the CGST Act. After this, the officer arrested him and presented him in court. The court has sent him to judicial custody till 30 April 2026. At present, further investigation of this matter is going on.