Credit fraud

Maha: Two business owners detained over input tax credit fraud worth over Rs 20 crore

PTI, August 19, 2022, 1:18 PM IST

Central Commissioner of Goods and Services TAX (CGST) officials have arrested two business owners based in Bhiwandi, Thane district, Maharashtra, for allegedly fraudulently using an input tax credit ( ITC) with a collective value of over Rs 20 crore.

The arrests took place on Thursday after the fraudulent activities of the two firms were uncovered, said the CGST Bhiwandi police station in the Mumbai area.

With their arrest, the Bhiwandi commissioner has so far detained 16 people for such crimes in the last year, he added.

Officials busted a fake GST bill racket, which was used to use and pass fake ITCs of around Rs 18 crore on fake bills of Rs 41 crore. The owner of MM Buildcon / Lambodar Buildcon has been arrested under the CGST Act, he said in a statement. “Acting on specific information, the anti-evasion branch of the CGST Bhiwandi police station has opened an investigation against the company. During the investigation, the company turned out to be non-existent and fake. The owner said he left the registered premises in 2018,” he added. Even after leaving the premises, the company continued to use the same address in all of its transactions, including sales and purchases, the commissioner said. Based on physical evidence gathered during the investigation, the business owner was arrested and taken into custody until August 30, he said. This is the 16th arrest by the CGST Bhiwandi police station in the past year. In the second case, the commissioner busted a fake GST invoice racket involving Vishwakarma Enterprises, which was found to have used an ineligible ITC of Rs 2.57 crore through fake invoices of Rs 14.30 crore. The business owner was the 15th person to be arrested by the Bhiwandi commissioner, he added. “Acting on specific data, the anti-avoidance wing opened an investigation against the business and it was found that the main establishment was residential premises and the taxpayer had used an ineligible ITC of Rs 2.57 crore “, reads the press release.

After his arrest, the accused was released on bail by the Bhiwaandi police station.

This case is part of the special campaign launched by CGST Mumbai Zone against tax evaders and fake ITC networks.