Director Arrested for Tax Fraud of Rs.19 Crores by CGST Officials

Director of M/s Omnipotent Industries Ltd (GSTIN: 27AACCO3769R1ZL) has been arrested by CGST, Navi Mumbai on the charges of availing and utilizing Input Tax Credit (ITC) which was received from bogus/fake entities amounting to Rs 19.51 Crores on Friday (29th July, 2022).

A team of officers from Anti-Evasion, CGST, and C.Ex. Navi Mumbai investigated the aforementioned company. On the basis of bills totaling more than Rs. 120 crore without the provision of goods or services, the aforementioned firm has obtained and used ITC totaling Rs. 19.51 crores from fictitious/false entities. The fact that two people were previously detained in January 2022 is relevant to remark. However, the primary victim and the mastermind have eluded capture for the past seven months in order to avoid the inquiry process. It appears that an entire cartel of fictitious invoices was produced to list the company in order for M/s Omnipotent Industries Private Ltd. to raise money through stock.

According to the provisions of Section 132(1)(c) of the CGST Act, 2017, if a taxpayer issues invoices and/or bills without the supply of goods or services or both, which results in the wrongful availment or utilisation of input tax credit, or if the taxpayer utilises input tax credit using such an invoice or bill, the Section 132(1)(i) renders the taxpayer punishable with imprisonment for a term that may extend to five years as well as with a fine. Additionally, the offences listed above are cognizable and not subject to bail under Section 132(5).

According to Commissioner of CGST and Central Excise in Navi Mumbai Shri Prabhat Kumar, the above accused was detained under Section 69 (1) of the Central Goods and Services Act, 2017 for committing offences under Section 132 (1)(c) of the same Act. He was produced before Judicial Magistrate First class, Vashi at Belapur on July 29, 2022, and has been placed in judicial custody for 14 days.

The CGST Navi Mumbai Commissionerate discovered Rs. 543 crore in GST evasion during the financial year 2021–2022 and collected Rs. 41.47 crore while arresting 16 tax evaders.

To identify prospective fraudsters, Central Intelligence Unit agents use data analysis and network analysis techniques, sharing the results with jurisdictional commissionerates for additional inquiry. This case is a component of the CGST Mumbai Zone’s special campaign against con artists and Fake ITC network sellers.