The Central Goods and Services Tax (CGST) Mumbai busted a fake GST Input Tax Credit (ITC) racket and arrested the proprietor of a Malad based firm. The firm was allegedly involved in fraudulent availment and passing of the ITC of Rs 15.23 crore without receiving the supply of goods, hence violating the provisions of the CGST Act. In the last six months, CGST Mumbai West has unearthed fake ITC amounting to Rs. 465.75 crore, recovered Rs. 35.57 crore and arrested five persons.
Acting on a tip-off received from the Central Intelligence Unit of the CGST, an investigation was initiated against M/s Pacific Pharma, which deals in the trading of chemicals. CGST Mumbai Zone found that bogus bills of around Rs 105 crore were issued for this tax fraud.
The owner of the firm was arrested and produced before the court on Thursday after which he was remanded to 14 days in judicial custody. Further investigation is under progress, officials said.
This operation is a part of efforts by CGST Mumbai Zone to stamp out fake ITC networks and tax evaders, which have been causing unhealthy competition with honest taxpayers and defrauding the government exchequer.
"The CGST officers are using data analysis and network analysis tools to identify potential fraudsters. Department is going to intensify the drive against tax evaders this financial year," said an official.
In a separate case, while analyzing a group of newly registered taxpayers by comprehensive analytic tools of Maharashtra GST, the department noticed the suspicious business activity amounting to more than 200 crores of some taxpayers.
These taxpayers are M/s. Empire Enterprises, M/S. Shankar Enterprises & M/S. M M Enterprises. Thereafter, investigation visits were conducted at various business premises of these taxpayers situated in Ulhasnagar on April 25 by teams of Maharashtra State GST.
At the time of the investigation, it was found that all these taxpayers had obtained GST registration by providing fake documents such as electricity bills collected from doorsteps and making leave & license agreements without the knowledge of premise owners.
The tax-payers circulated bogus invoices of taxable value at Rs. 218.26 cr to other taxpayers without supplying any goods or services and thus they passed on ITC at Rs 39.28 crore to their beneficiaries. Three persons have been arrested in the said case.
