New Delhi. The Central Goods and Services Tax (CGST) Delhi South Commissionerate has arrested an iron and steel trader for allegedly availing, utilising and passing on more than ₹25.22 crore in inadmissible Input Tax Credit (ITC) through bogus invoices worth around ₹140.14 crore. The action was taken as part of the department’s enforcement drive against fraudulent ITC claims.
The Anti-Evasion Branch of the CGST Delhi South Commissionerate arrested the trader on September 17 under Section 69 of the Central Goods and Services Tax Act, 2017. He was subsequently produced before the Patiala House Court, which remanded him to 14 days in judicial custody.
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According to the Finance Ministry, the investigation found that the concerned firm had claimed ITC on the basis of invoices issued by multiple suppliers. Several of these supplier firms were found to be non-existent, non-functional, suspended or cancelled during the investigation. Field verification at the declared business premises of some suppliers also found no genuine business activity.
The investigation further found that the firm allegedly claimed ITC without actually receiving the goods covered by the invoices. The credit was subsequently passed on to other recipients through invoices that were allegedly not backed by any corresponding supply of goods.
According to the department, the case involves more than ₹25.22 crore in alleged fraudulent ITC linked to invoices worth approximately ₹140.14 crore. ITC allows businesses, subject to prescribed conditions, to offset eligible GST paid on inputs against their tax liability. However, claims based on invoices that are not supported by actual supplies can be treated as inadmissible under GST provisions.
The department said the arrest followed evidence gathered during the investigation and statements recorded under Section 70 of the Central Goods and Services Tax Act. Investigators also examined documents related to the alleged transactions and verified the status and business activities of the suppliers involved.
The status of the supplier firms has emerged as a key part of the investigation. The inability to verify the existence or genuine business activities of several firms raised questions about the invoices on the basis of which ITC was allegedly claimed. Field verification at declared business locations also formed part of the investigation into the transactions.
The department is continuing its probe into the alleged ITC fraud, including the transactions involved and the role of other parties. The Finance Ministry said further investigation is underway. The probe is expected to examine the broader network of businesses or entities that may have been involved in allegedly claiming and passing on ITC through invoices that were not supported by actual supplies.
The CGST action is part of enforcement efforts targeting cases in which ITC is allegedly claimed on the basis of invoices without genuine supply of goods or services. In the Delhi case, the investigation remains focused on alleged inadmissible ITC exceeding ₹25.22 crore and transactions involving invoices valued at approximately ₹140.14 crore.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
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