The Central Goods and Service Tax (CGST) Delhi South Commissionerate busts racket of firms fraudulently claiming Input Tax Credit (ITC) of ₹17 crore.

A specific intelligence was developed by the officers of Central Goods and Service Tax (CGST) Delhi South Commissionerate concerning certain bogus firms that were created solely for the purpose of generating goods less invoices and passing on of ineligible input tax credit along the chain.

Inspections were conducted at the registered premises of 03 bogus firms/company namely M/s. NexGen Busicorp, M/s. XEL Informatics and M/s. GW Infotech Pvt. Ltd. registered in the jurisdiction of CGST Delhi South Commissionerate that were engaged in fake invoicing and circular trading. Incriminating documents were resumed from the premises of the taxpayers.

Preliminary enquiry conducted so far into the transactions of these firms has revealed tax evasion of Rs. 17 crore approx. The Proprietor/Director in his confessional statements has admitted his role in passing and availing fraudulent ITC without any underlying supply of goods.

The persons behind these bogus firms have defrauded the government exchequer and committed offences specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and non-bailable. Two persons namely Sh. Sanjay Kumar Srivastava and Sh. Sunil Gulati have been arrested on 17.03.2023.The accused were produced before the Duty Metropolitan Magistrate following which they have been remanded to judicial custody for 14 days.

Further investigation is in progress.

Fraudulent input tax credit scheme uncovered, leading to arrests and ongoing criminal investigation under GST offences. Intelligence-led inspections of three registered entities revealed creation of bogus firms to generate goods-less invoices and circulate ineligible Input Tax Credit, with recovered documents and confessions indicating fraudulent claiming and passing of ITC without actual supplies. The operation identified substantial tax evasion and implicated persons for offences under 132(1)(b) and 132(1)(c) of the CGST Act; arrests were made and further investigation continues.