Mumbai: CGST busts fake ITC racket, one arrested

The Central Good and Services Tax (CGST) commissionerate has arrested a Mumbai-based businessman for allegedly claiming and passing off fake input tax credit (ITC) of Rs 10.10 crore through his firm.

Mumbai: The Central Good and Services Tax (CGST) commissionerate has arrested a Mumbai-based businessman for allegedly claiming and passing off fake input tax credit (ITC) of Rs 10.10 crore through his firm.

Acting on a tip-off from the Central Intelligence Unit of Mumbai CGST Zone, the GST officers arrested the Director of Necil Metal Dealers Private Limited located at Versova. The company deals in ferrous waste and scrap among other things.

Officials said the company was involved in fraudulently claiming and passing off input tax credit (ITC) to the tune of Rs 10.10 crores without any supply or receipt of goods or services. The action, they said, was in gross violation of the provisions of the Central Goods and Services Tax Act of 2017.

The arrested person was later produced before the additional chief metropolitan magistrate, Esplanade in Mumbai on Thursday. The court sent him to 14 days of judicial custody. Officials said the operation was a part of a large-scale effort by the GST officials to stamp out fake GST dealers who either issue or procure fake GST invoices without actual supply of goods or services.

Read:Fake Input Tax Credit racket of Rs 70 crore busted in Mumbai, 2 held

According to some estimates, CGST Mumbai West officials have unearthed fake input tax credit (ITC) worth over Rs 187 crores and recovered over Rs 13.25 crores in the last six months.

As reported earlier by ETV Bharat, the GST officials started the biggest ever drive against the use of fake GST invoices in November 2020. Officials of GST Intelligence have been using Artificial Intelligence, Big Data and Machine Learning and matching the GST returns filed by the companies with their income tax returns and their director’s income tax returns to detect any mismatch.

In the recent past, GST officials have arrested hundreds of offenders including more than a dozen chartered accountants, company secretaries, directors and promoters of the companies, and several masterminds of bogus firms for generating fake GST invoices. GST officials have also cancelled the registration numbers of scores of firms for not filing GST returns in time.

Read:Network of fake exporters busted in Delhi, one held for input tax fraud of Rs134 crore