Major Racket of Fake Invoicing of ₹ 7896 Crore Busted Involving Network of 23 Shell Companies

Two Accused Arrested & Remanded to 14 Days Judicial Custody

The officers of Anti Evasion wing of Central Tax, Delhi West Commissionerate have busted a major racket of fake invoicing of ₹ 7896 crore involving fraudulent Input Tax Credit (ITC) of ₹ 1709 crore, using 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 on 29.02.2020, 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 arrested on 29.02.2020 under Section 69(1) of the CGST Act, 2017 and remanded to fourteen days judicial custody by the Chief Metropolitan Magistrate, Patiala House Court.

Further investigation in the matter is under progress.

Fraudulent input tax credit scheme uncovered; arrests made and prosecution initiated under GST anti-evasion provisions. Investigation disclosed a network of 23 shell companies issuing invoices without actual supply to generate and pass on fraudulent Input Tax Credit, using banking transactions to simulate legitimacy. The scheme implicated creation of dummy firms, issuance of fake invoices to enable ineligible ITC claims, and seizure of electronic evidence. Allegations were framed under Section 132 of the CGST Act and arrests effected under Section 69(1); the alleged offences are cognizable and non-bailable, and further investigation is ongoing.