The CGST Delhi North Commissionerate arrested one person who received fake/goods-less invoices valued at ₹ 71,22,95,370/- involving fraudulent Input Tax Credit of ₹ 12,82,05,579/- from 30 bogus/fake firms.

The modus operandi was to create various fake firms in the name of employees of the operator of fake firms and other persons. Fake e-way bills were generated for several vehicle numbers. Bogus invoices were received by the accused from the operator of fake firms for the purpose of availment of fraudulent Input Tax Credit.  Payments were made to the operator of these bogus/fake firms through Bank & the same were received back in cash by the accused after deducting the commission (up to 50% of the tax value involved in the fake/goods-less invoices).

Simultaneously, the accused used to procure non-GST paid goods from small unregistered manufactures/traders without paying the GST and used to pass on the fraudulently availed ITC (as mentioned above) to his buyer.

In this way, the accused has committed offence under section 132(1)(c) of CGST Act, 2017 which is cognizable and non-bailable under section 132(5) and punishable under clause (i) of sub section (1) of Section 132 of the Act ibid. Accordingly the accused was arrested on 07.03.2020 under Section 69(1) of the CGST Act, 2017 and was produced before the Chief Metropolitan Magistrate, Patiala House Courts, where he was sent to judicial custody till 21.03.2020.

Further investigation in the case is in progress.

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RM/KMN

Input Tax Credit fraud uncovered leading to arrest under CGST provisions and ongoing investigation into fake firms. Detection by CGST Delhi uncovered a scheme using 30 fake firms, bogus invoices and fabricated e way bills to obtain fraudulent Input Tax Credit; payments were routed through banks to an operator who returned cash after commission, and the accused procured non GST paid goods from unregistered suppliers while investigators continue inquiries.