Thane, Feb 12 (PTI) Authorities have busted a Goods and Services Tax (GST) evasion racket involving a fraudulent input tax credit (ITC) scam of Rs 26.92 crore and arrested its "mastermind" in Maharashtra's Thane district, officials said.

The accused, Kapadiya Mahamad Sultan, orchestrated the fraud by setting up 18 fictitious entities which were used to generate fake invoices and claim ITC without any actual supply of goods or services, CGST Joint Commissioner Amit Kumar Singh said in a release issued on Tuesday.

Sultan, resident of Mira Road area in Thane, was arrested on Monday, the official said.

Investigations suggested that Sultan exploited the Aadhaar, PAN and other KYC documents of various people, who were paid in exchange for their personal information.

These documents were used to fraudulently register the fake firms for GST, open bank accounts, and create a network of dummy companies that engaged in proxy transactions, the release said.

The fraudulent input tax credits were then passed on to other firms, causing significant loss to the exchequer, it said.

Sultan, who has admitted to his involvement in the fraud, was booked under relevant provisions of the CGST Act, the official said.

Following his arrest, Sultan was produced before a local court which remanded him in 14-day judicial custody.

A probe was underway to identify others involved in the racket, the official added. PTI ZA GK

GST evasion via fraudulent input tax credit uncovered; alleged mastermind arrested and booked under CGST Act. Investigations uncovered a network of 18 fictitious firms used to generate fraudulent input tax credit (ITC) claims through misuse of Aadhaar, PAN and other KYC data; the alleged organiser admitted involvement, was arrested and booked under relevant provisions of the CGST Act, remanded to judicial custody while probes continue to identify other participants and trace fraudulent credit flows.