Fake invoicing racket of Rs7,896 cr involving network of 23 shell companies busted
04 March 2020
Officials of the Anti Evasion wing of Central Tax, Delhi West Commissionerate have busted a major racket of fake invoicing involving Rs7,896 crore resulting in fraudulent Input Tax Credit (ITC) of Rs1,709 crore. The fraudsters used a network of 23 shell companies, which procured and generated invoices without actual supply of goods and availed as well as passed on ITC.
Two persons have been arrested in this matter.
The accused persons were evading tax by creating several dummy firms for the purpose of passing on ITC by generation of fake invoices. They also used banking transactions to make ITC appear genuine. These firms issued the fake invoices to buyers, who availed fraudulent input tax credit without actually receiving any goods and defrauded the exchequer by way of availing ineligible ITC towards GST liability.
They were caught in their hideout with several mobile phones, computers and incriminating documents.
The accused have committed offences under Section 132(1)(b) and Section 132(1)(c) of CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132 (5) and punishable under Clause (i) of Sub section (1) of Section 132 of the CGST Act, 2017. Accordingly, the accused were have been remanded to fourteen days judicial custody by the Chief Metropolitan Magistrate, Patiala House Court.
Further investigation in the matter is under progress, a finance ministry release stated.
Meanwhile, the government has allowed units in the small and medium sector to avail of the benefit of the new return model under GST which ensures quarterly filing of returns for those taxpayers whose annual aggregate turnover in the preceding financial year does not exceed Rs5 crore.
Quarterly payment of GST is available to those MSMEs who opt for composition levy under section 10 of CGST Act, 2017.