CGST Commissionerate, Navi Mumbai had busted a fake ITC racket of ₹ 10.68 Crores and arrested the proprietor of M/s. Navnit Steels (GSTIN: 27AEXPD3871K1ZV) on Wednesday (February 2, 2022). The firm has engaged in availing and utilizing a fraudulent Input Tax Credit (ITC) on the bogus invoices of ₹ 60 Crore, thereby defrauding the government exchequer.

A team of officers of Anti-Evasion under CGST, Navi Mumbai conducted enquiry against the aforesaid firm. As per the statement of the proprietor, the said firm is involved in trade of raw material and finished goods of Aluminium and steel. However, the investigation revealed that the taxpayer has availed and passed on fake ITC from various non-existing/bogus firms.  The accused has been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) &(c) of the said Act and were produced before the Judicial Magistrate First class, Vashi at Belapur on 03.02.2022 and has been sent on judicial custody for 14 days. This has been stated by the Commissioner, CGST and Central Excise, Navi Mumbai Shri Prabhat Kumar. 

This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the fraudsters and tax evaders who creating unhealthy competition for compliant taxpayers and defrauding the Government exchequer. As a part of this drive, Navi Mumbai Commissionerate has detected tax evasion of ₹ 425 Crore, recovered ₹ 20 crores and arrested 11 persons recently.

The CGST Department is using data analysis tools to identify tax evaders. By using data analysis and network analysis, the officers of CGST Mumbai zone have booked more than 625 tax evasion cases, detected tax evasion of ₹ 5500 Crore, recovered ₹ 630 Crore and arrested 48 persons, in the last five months. The CGST department is going to intensify the drive against the fraudsters and tax evaders which are causing unfair competition with honest taxpayers and defrauding the government exchequer of its rightful revenue in the coming days and months.

Fake Input Tax Credit fraud leads to arrests and prosecution under CGST provisions after network analysis uncovered bogus invoices. Investigation uncovered coordinated use of bogus invoices and non existent suppliers to avail and pass on fraudulent Input Tax Credit (ITC) in the trade of aluminium and steel. The enforcement operation, using data and network analysis, led to registration of tax evasion cases, recoveries and arrest of the proprietor under Section 69(1) linked to alleged offences under Section 132(1)(b) & (c), forming part of a wider anti evasion drive to detect bogus invoicing and unfair competition.