CGST & Central Excise officials make arrests in Mumbai

An arrest was made by the officers of CGST & Central Excise, Mumbai Central Commissionerate in an ongoing investigation involving receipt and supply of ineligible Input Tax Credit amounting to Rs. 6.46 crores. The availment was made by M/s S.R. Enterprises against fake invoices issued by various Non-Existing/Fake/Fictitious firms without actual receipt of goods.

Mumbai: An arrest was made by the officers of CGST & Central Excise, Mumbai Central Commissionerate in an ongoing investigation involving receipt and supply of ineligible Input Tax Credit amounting to Rs. 6.46 crores. The availment was made by M/s S.R. Enterprises against fake invoices issued by various Non-Existing/Fake/Fictitious firms without actual receipt of goods. This quantum is likely to go up after further investigation. The investigation was carried out by acting upon specific intelligence developed locally and supported thoroughly by data-based analysis, as per press release.

The investigation appears to show that this firm availed the ineligible Input Tax Credit (ITC) against fake invoices (where no supplies from any suppliers have been physically received) and passed on the same to other buyers. This fraudulent activity is causing a severe loss of revenue to the exchequer.

In this connection, search/inspection was conducted by the anti-evasion team of CGST & Central Excise, Mumbai Central Commissionerate at the office and godown of the proprietor and after detailed questioning, one person who is the proprietor of the firm was arrested on September 24, 2021 under section 69 of CGST Act, 2017 and relevant provisions of CrPC for availing ineligible ITC amount of Rs. 6.46 Crores and was produced before the Additional Chief Metropolitan Magistrate, Fort, Mumbai.

The court has sent the accused to 14 days of judicial custody. Further investigation in the matter to identify other scamsters involved in the tax fraud is under process. This is the second arrest by CGST & Central Excise, Mumbai Central Commissionerate in the last 2 days. The department has launched a drive against fake invoice racketeers who try to defraud the government exchequer and lead to unhealthy competition with honest taxpayers. This is a step to highlight the department's commitment and support to honest taxpayers.