CGST Delhi Busts ₹31.95 Crore Fake ITC Fraud, Director Arrested

CGST Delhi Busts ₹31.95 Crore Fake ITC Fraud, Director Arrested

Issue: To curb significant revenue leakage and crack down on fraudulent activities, the CGST Anti-Evasion Branch of the Delhi South Commissionerate investigated a firm suspected of illegally availing and passing on Input Tax Credit (ITC) without any corresponding supply of goods or services.

Facts:

• The investigation was initiated by the Anti-Evasion wing of the CGST Delhi South Commissionerate based on specific intelligence.
• The inquiry revealed that the firm had fraudulently availed and passed on ineligible Input Tax Credit (ITC) of approximately ₹31.95 crore.
• The modus operandi involved generating fraudulent ITC solely on the basis of invoices without any underlying supply of goods or services.
• Further investigation established that the firm availed and passed on ineligible ITC from fictitious and non-existent firms.

Decision:

The Director of the company, who was orchestrating the evasion, was arrested and produced before the competent judicial authority. The court subsequently remanded him to judicial custody for 14 days.

Key TakeDowns:

• Scale of Fraud: The case highlights the prevalence of sophisticated fake invoicing networks aimed at draining the government exchequer of large sums of revenue.
• Enforcement Focus: The department is actively leveraging data analytics and supply chain mapping tools to proactively identify and disrupt such fraudulent activities. * Judicial Action: The arrest and subsequent judicial remand underscore the stringent punitive action being taken by authorities against those involved in orchestrating economic offenses under the GST Act.