Delhi GST officers unearth ₹17 crore tax evasion scam

GST officers in Delhi have unearthed a fake invoicing racket involving tax evasion of Rs 17 crore and arrested two persons, the Finance Ministry said on Saturday.

Central Goods and Service Tax (CGST) Delhi South Commissionerate conducted inspection at the registered premises of three bogus firms/company, namely M/s. NexGen Busicorp, M/s. XEL Informatics and M/s. GW Infotech Pvt., engaged in fake invoicing and circular trading, according to a statement.

How was it exposed?

During the inspection, some incriminating documents were found 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," an official statement said.

What next?

In this case, two persons -- Sanjay Kumar Srivastava and Sunil Gulati -- were arrested on March 17. The accused were produced before the Duty Metropolitan Magistrate following which they have been remanded to judicial custody for 14 days, the ministry said.

The officers acted on specific intelligence 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.