Delhi South CGST unearths Fake Invoicing Racket involving Tax Evasion of Rs.17 crore; 2 Arrested

The Central Goods and Service Tax (CGST) Delhi South Commissionerate busts racket of firms fraudulently claiming Input Tax Credit (ITC) of Rs.17 crore.

The authorities of the Central Goods and Service Tax (CGST) Delhi South Commissionerate developed special intelligence regarding certain fictitious organisations that were founded expressly for the aim of generating items without invoicing and passing on ineligible input tax credit along the chain.

Inspections were carried out at the registered premises of three bogus firms/companies, namely M/s. NexGen Busicorp, M/s. XEL Informatics, and M/s. GW Infotech Pvt. Ltd., all of which were engaged in fake invoicing and circular trading and were registered in the jurisdiction of the CGST Delhi South Commissionerate. Incriminating documents were recovered from the taxpayers’ premises.

So far, preliminary investigations into the transactions of these entities have shown tax evasion of approximately Rs. 17 crore. In his confessional admissions, the Proprietor/Director confirmed his role in passing and availing bogus ITC without any underlying supply of products.

The individuals behind these bogus firms cheated the government exchequer and committed cognizable and non-bailable offences under sections 132(1)(b) and 132(1)(c) of the CGST Act 2017. On March 17, 2023, two people were arrested, Sh. Sanjay Kumar Srivastava and Sh. Sunil Gulati. The accused were brought before the Duty Metropolitan Magistrate and were detained in judicial detention for 14 days.

Further investigation is in progress.