Two held for tax fraud
File photo

The Central Goods and Service Tax (CGST) Thane unit arrested two persons and booked a case of fake invoice and utilisation of inadmissible Input Tax Credit (ITC) against two firms.

According to CGST, the names of the firms are M/s Neha Impex and M/s Rohini Inpex. “During the investigations, it was found that both the firms were created on the name of dummy persons and on the basis of fraudulent documents,” the CGST said. The ITC is an option in the GST which allows the taxpayers to claim credit for the taxes paid on the purchase.

“The said firms had issued the fake invoices without supply of goods or services to a group of nine firms being owned and operated by Hanif Mohammed Nagaria and Faisal Hanif Mohammed Nagaria,” officials said.

Investigations revealed that they had floated these two firms to avail inadmissible ITC which was then encashed by them by way of refund through their nine firms under the grab of export of readymade garments. “The total value of invoices issued by the two firms is Rs 233.21 crores and the tax involved in the said amount was Rs 13.82 crores,” the CGST said. The agency arrested the duo on Friday and were produced before a court which has remanded them to judicial custody till December 10.

The Directorate General of GST Intelligence has also been cracking down against fake ITC frauds amounting to several hundred crores. On Wednesday, the Mumbai zonal unit arrested three persons for having indulged in massive frauds involving the availment and utilization, as well as passing on of ITC on the strength of bogus invoices.

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