Credit fraud

Export company manager arrested for ‘fraud of GST input tax credit over Rs 15 crore’

The anti-evasion wing of the Thane CGST (Central Goods and Services Tax) Commissariat in the Mumbai area has arrested the manager of an export business, Corvette Trade link Pvt Ltd, for allegedly fraudulently claiming a credit of input tax of Rs 15.26 core.

According to a statement from the CSGT department, this input tax credit was claimed on the basis of fake invoices of Rs 85 core issued by fake entities.

The Thane CGST department had received a tip-off from Delhi Customs after which they investigated the shoe exporter. His investigation revealed that the company had used the input tax credit for GST based on bogus invoices issued by bogus non-existent Delhi entities. The company had used this fake ITC for the payment of IGST (Integrated Goods and Services Tax) for exports through the ICD Tughlakabad, Delhi and then applied for a refund of the IGST from Indian Customs.

According to the statement, the department arrested the director on March 3, convicting him of violating Sections 132(b) and 132(c) of the 2017 CGST Act. The accused was brought before the Chief Metropolitan Magistrate of Mumbai and taken into custody for 14 days. If convicted, he faces up to five years in prison and a fine, the statement added.

The case is part of an anti-evasion campaign launched by CGST, Mumbai Zone against evaders and tax evaders, the statement said. The CGST Thane Commissionerate detected tax evasion of Rs 1,238 core, recovered Rs 20 core and arrested seven people in the past six months, it added.

The ministry said it uses data mining, data analysis and network analysis tools to identify fraudsters and potential fraudsters. He also added that the anti-escape campaign would intensify in the coming days.