The officers of Mumbai Central GST Commissionerate of Mumbai Zone have arrested the 2 persons involved in two separate cases of availment & utilization of fake/inadmissible Input Tax Credit (ITC).

In the first case, analysis of data indicated that M/s Epsilon Sales Corp, which deals in trading of scrap material and other metal products, was indulging in GST evasion. Based on this analysis, an investigation was initiated which revealed that this firm was involved in fraudulent availment & utilization and passing of inadmissible Input Tax Credit (ITC) of Rs. 14 Crores without receiving or supply of goods, in gross violation of the provisions of CGST Act, 2017. Bogus bills of around Rs.75 Crores were issued for this tax fraud. The statement of the mastermind behind this firm was recorded on 09.06.2022 wherein he admitted his role in GST fraud in respect to this firm along with his role in more than 278 such bogus firms which involves fake Input Tax Credit of Rs. 348 Crores. He was arrested under Section 69 of CGST Act, 2017 for contravention of Section 132 of CGST Act, 2017 and produced before Chief Metropolitan Magistrate on 09.06.2022. The court has remanded him to 14 days judicial custody.

In another case, M/s Bharat Shah & Company, which deals in trading of scrap material and other metal products, was indulging in GST evasion by way of availing and utilization of inadmissible ITC. Based on this analysis, an investigation was initiated which revealed that this firm was involved in fraudulent availment & utilization and passing of inadmissible Input Tax Credit (ITC) of Rs. 22.76 Crores without receiving of goods from 40 fake/nonexistent firms, which is in gross violation of the provisions of CGST Act, 2017. Bogus bills of around Rs.156 Crores were issued for this tax fraud. The proprietor of the firm has admitted that he has availed ITC on the strength of invoices issued by fake/non-existent firms. He was arrested under Section 69 of CGST Act, 2017 for contravention of Section 132 of CGST Act, 2017 and produced before Chief Metropolitan Magistrate on 14.06.2022. The court has remanded him to 14 days judicial custody. Further investigations in both these cases are under progress.

This operation is a part of efforts by CGST Mumbai Zone to stamp out fake ITC networks and tax evaders, which have been causing unhealthy competition with honest taxpayers and defrauding the Government Exchequer. As apart of theses efforts, since the last financial year, CGST Mumbai Central Commissionerate has unearthed fake ITC amounting to Rs. 984 Crores, recovered Rs. 150 Crore and arrested 13 tax evaders.

The CGST officers are using data and network analysis tools to identify potential fraudsters. Department is going to intensify the drive against tax evaders in this financial year.

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CGST Mumbai PRO/CP/DY

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