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February 7, 2022

CGST Mumbai South smashes a network of fictitious firms which generated fake Input Tax Credit of Rs 49 crores

by CA Shivam Jaiswal in Income Tax

CGST Mumbai South smashes a network of fictitious firms which generated fake Input Tax Credit of Rs 49 crores

Officers of CGST Mumbai South has smashed a network of fictitious firms which issued fake invoices of Bullion of around Rs. 1650 Crores and fake Input Tax Credit (ITC) of Rs. 49.7 Crores and was remanded to judicial custody by Additional CMM Court, Mumbai.

The arrested person had created multiple bogus including M/s Karnataka Jewellers, M/s Balaji Enterprises and M/s Kismat Enterprises. These three entities had collectively availed and passed on fake ITC of Rs. 29.4 Crores to another entity Gajamukhi Bullion, which further passed a part of this fake ITC Rs. 20.27 Crores to M/s Golden Bullion, without actual movement of goods or services. The proprietor of M/s. Golden Bullion was arrested in the past, informed Additional Commissioner, Mumbai South Shi Rajiv Shankar.

Detailed investigations revealed that the arrested person was creating fictitious firms at various locations including Mumbai, Belgaum and Bikaner, for monetary gains. Based on material evidence and his confession, he was arrested under Section 69 of the CGST Act for offences under Section 132(1)(b), 132(1)(c) read with Section 132(5) of CGST Act. He was produced before Additional CMM court Mumbai on 03.02.2022. He was sent to judicial custody of 14 days. Efforts are underway to apprehend other persons involved in this network.

This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the tax evaders. As a part of this drive, CGST Mumbai South Commissionerate has detected tax evasion of Rs 570 Crores approx. recovered Rs. 7 Crores approx. and arrested 7 persons during the last five months.

The CGST department is using data analysis and network analysis tools to identify potential tax evaders and coordinating with other tax authorities for nabbing tax evaders. The department is going to intensify this anti-evasion drive in the coming days and months.

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