CGST Bhiwandi Commissionerate unearths fake ITC network
31 January 2022
Officers of Bhiwandi Commissionerate of CGST Mumbai Zone have arrested a businessman who was running a fake GST Input Tax Credit (ITC) racket. Acting on an intelligence input from the Central Intelligence Unit of Mumbai CGST Zone, the officers initiated coordinated action at different locations in Thane, Bhiwandi, Raigad and Mumbai and detected GST evasion of Rs11.4 crore through generation and passing of fake ITC through an intricate web of bogus billing of more than 630 million.
The search was conducted at Bhiwandi-based business premises of Adarsh Scrap Traders, which was indulging in bogus billing for availing tax credit and passing on of fake ITC, thus defrauding the overnment exchequer of GST revenue.
Initial investigation revealed that the firm had fraudulently claimed and passed on Input Tax Credit of Rs11.4 crore without actual supply or receipt of goods. The proprietor of the firm confessed to the bogus billing and running of fake ITC racket. He was arrested on 21 January under Section 69 of CGST Act, 2017 and was produced before the Additional Chief Metropolitan Magistrate, Mumbai, on 22 January. The court has remanded the accused to 14 days judicial custody, till 4 February 2022.
The amount of fake ITC involved is likely to go up during the ongoing investigation once the entire network is investigated. According to the directorate, this is part od a network spread across the cities of Nagpur, Pune, Delhi and Nasik apart from Mumbai and Thane. Around 25 entities have so far been identified as part of this network. Respective jurisdictional commissionerates are being informed to initiate legal action against the firms falling in their jurisdiction.
This operation is a part of efforts by CGST Mumbai Zone to eradicate fake ITC networks, which have been vitiating the healthy economic ecosystem of the country and defrauding the government exchequer. This the sixth arrest by Bhiwandi Commissionerate in the last 6 months. The department plans to intensify the drive against fake ITC networks and other GST evaders in the coming months.