The CGST authorities have arrested a partner of an iron and steel trading firm for allegedly fraudulently availing, using and passing on inadmissible Input Tax Credit of more than ₹15 crore through bogus invoices worth approximately ₹87.67 crore.
The arrest followed an investigation by the anti-evasion branch of the CGST Delhi South Commissionerate. The inquiry found that the firm had allegedly claimed ITC on invoices issued by multiple firms, several of which were found to be non-existent, non-functional, suspended or cancelled.
Bogus Invoices Worth ₹87.67 Crore Under Scanner
According to the Finance Ministry, the case involves inadmissible ITC aggregating to more than ₹15.78 crore, allegedly generated through bogus invoices valued at approximately ₹87.67 crore.
Investigators found that the firm had relied on invoices from multiple suppliers to claim the tax credit. Field verification established that certain suppliers had no genuine business activity at their declared places of business. The findings prompted investigators to examine whether the transactions reflected in the invoices were backed by actual movement and supply of goods.
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ITC Allegedly Claimed Without Receiving Goods
Further inquiry established that the Input Tax Credit was allegedly availed without the actual receipt of goods. The credit was also passed on to various recipients through invoices issued without corresponding supplies. The investigation has therefore focused not only on the ITC claimed by the firm but also on its alleged utilisation and subsequent transfer to other recipients.
The case relates to a firm engaged in trading iron and steel goods. According to the Finance Ministry statement, the alleged transactions involved fraudulent availment, utilisation and passing on of inadmissible ITC.
The evidence gathered during the investigation included material collected by officials as well as statements recorded under Section 70 of the Central Goods and Services Tax Act, 2017.
Accused Sent to 14 Days’ Judicial Custody
Based on the evidence gathered during the investigation and the statements recorded under the CGST Act, the accused was arrested on September 14. The accused was subsequently produced before the Patiala House Court. The court remanded him to judicial custody for 14 days.
The case centres on alleged misuse of the Input Tax Credit mechanism through invoices that investigators say were not supported by genuine supplies of goods. The inquiry also found that several firms whose invoices were used for claiming the credit were either non-existent, non-functional, suspended or cancelled, while some suppliers showed no genuine business activity at their declared addresses.
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