Businessman, running fake Tax Credit racket, arrested by CGST Bhiwandi

A businessman, who was running a Fake GST Input Tax Credit racket, has been caught by the officers of Bhiwandi Commissionerate of CGST Mumbai Zone.

The Central Intelligence Unit of Mumbai CGST Zone acted on an intelligence input and launched a coordinated effort at different places in Thane, Bhiwadi, Raigad and Mumbai. The team has detected GST evasion of Rs 11.4 crores.

This evasion was done through the generation and passing of fake ITC through an intricate web of bogus billing of more than 63 Crores.

According to the Ministry of Finance, “The search was conducted at Bhiwandi based business premises of M/s. Adarsh Scrap Traders which was indulging in bogus billing and availment and passing on of fake ITC and thus defrauding the Government exchequer of its rightful GST revenue. The initial investigation revealed that firm had fraudulently claimed and passed on Input Tax Credit (ITC) of Rs.11.4 Crores without actual supply or receipt of goods.”

It further said, “The proprietor of the firm, confessed to the bogus billing and running of fake ITC racket. He was arrested on 21.01.2022 under Section 69 of CGST Act, 2017 and was produced before the Hon'ble Additional Chief Metropolitan Magistrate, Fort, Mumbai, today on 22.1.2022. The Hon'ble CMM has remanded the accused to 14 days judicial custody, till 04.02.2022.”

The investigating team is of the view that the amount of fake ITC involved might be more than what is being estimated now as the investigation is still on and the entire network is being probed. “The roots of this network are spread across the cities of Nagpur, Pune, Delhi and Nasik apart from Mumbai and Thane. At this stage, it seems that around 25 entities are part of this network. Jurisdictional Commissionerates are being informed to initiate legal action against the firms falling in their jurisdiction,” the Ministry said.