Mumbai Central CGST Commissionerate of Mumbai Zone has unearthed a fake supply and fraudulent availment of Input Tax Credit (ITC) network which has availed fake ITC of crores of rupees. As per the CGST officials, more than 20 fake entities have been used to evade GST through issuance of fake invoices of Rs 585 crore. Two persons involved in running the fake ITC racket of availment and utilization have been arrested recently.
According to the CGST officials, information was received that certain firms operated by the owner which deals in various commodities namely garments, trunks, petroleum oil, etc. were indulging in GST evasion by way of availment and utilization of fake ITC on the strength of bogus invoices. The investigation revealed that the said firms were found involved in fraudulent availment and utilization of inadmissible ITC of Rs 34.38 crores without movements of goods and services by issuing bogus bills of around Rs 216 crores on the name of non-existing firms to commit this tax fraud.
"Another person who had been operating 14 fake firms was involved in fraudulent availment and utilization and passing of inadmissible ITC of Rs 40.46 crores without movements of goods and services. Bogus bills of around Rs 369 crores were generated to commit this tax fraud. Both the accused were arrested and produced before the concerned court," the agency official claimed.
"The analysis of a WhatsApp chat group among three persons indicated a particular modus operandi where they seem to have agreed that another kingpin will generate bogus invoices and pass on fake ITC without supply of any goods to the owner of fake entities who will then transfer the amount equal to invoice value. But later he will get the money back circulated either through cash or through layers of other accounts. The deal between these two was to share the profit fraudulently availed on the basis of 50:50. However, one of the arrested persons was acting as a manager, operator and facilitator and was receiving hefty commissions from both," the agency claimed in a statement.
The 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. As part of these efforts, since the last financial year, CGST Mumbai Central Commissionerate has unearthed fake ITC amounting to Rs. 321 crore and has arrested 16 such tax evaders. The CGST officers are using data and network analysis tools to identify potential fraudsters. Department is going to intensify the drive against tax evaders in this financial year.
