GST Evasion of Rs.36 Crore involving 10 Fake Firms Detected; Businessman arrested in Gujarat

After the Central Goods and Services Tax commissionerate unearthed a Rs 36.95 crore GST evasion involving ten non-existent firms, a businessman from Ahmedabad was arrested for allegedly availing fake input tax credit (ITC) to the tune of Rs 7.22 crore, the CGST commissionerate here said on Wednesday.

The CGST Ahmedabad South Commissionerate’s preventive wing discovered “a web of non-existent firms involved in passing of fake input tax credit by routing invoices through a series of firms.” During the inquiry, the CGST commissionerate of Ahmedabad south discovered GST (Goods and Services Tax) evasion of Rs.36.95 crore with a taxable value of Rs.205.27 crore involving 10 bogus entities.

Vihol Viramji, the owner of Ashapura Traders, was arrested on May 29 for obtaining and using fraudulent input tax credits of Rs 7.22 crore. According to the announcement, he was brought before a metropolitan court here and sentenced to judicial imprisonment until June 13. “The CGST Ahmedabad South Commissionerate’s preventive wing has launched an investigation against firms involved in the availment and utilisation of fraudulent input tax credit without actual receipt of goods. These companies were primarily involved in scrap trading,” it stated. Furthermore, an all-India special campaign is presently underway to uncover suspicious/fake GST registrations, according to the statement.

According to the announcement, the commissionerate is “actively monitoring syndicates and groups involved in fraudulent availment and utilisation of input tax credit involving non-existing and fictitious firms, which leads to major GST evasion.” According to the report, four people have been detained so far this financial year for fraudulently obtaining and using input tax credits. Input tax credit typically refers to obtaining a credit for GST paid on purchases of goods and services utilised in the course of business.