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February 10, 2022

CGST Commissionerate in Navi Mumbai busts fake input tax credit racket, arrests proprietor of scrap metal firm

by CA Shivam Jaiswal in GST

CGST Commissionerate in Navi Mumbai busts fake input tax credit racket, arrests proprietor of scrap metal firm

CGST Commissionerate, Navi Mumbai has busted a fake ITC racket of Rs. 10.26 Crores and arrested the proprietor of M/s. Al-Marwah Traders on Tuesday (8th February, 2022). The firm was engaged in availing, utilizing and passing on a fraudulent Input Tax Credit (ITC) on the strength of bogus invoices of more than Rs. 60 Crores thereby defrauding the government exchequer.

A team of officers of Anti-Evasion, CGST, Navi Mumbai conducted enquiry against the aforesaid firm. As per the statement of the proprietor the said firm is involved in trade of scrap of ferrous, aluminium, copper and other metals. However, the investigation revealed that the taxpayer has availed and passed on fake ITC from various non-existing/bogus firms.  The accused has been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) &(c) of the said Act and were produced before the Judicial Magistrate First class, Vashi at Belapur on 09.02.2022 and has been sent on judicial custody for 14 days stated Commissioner of CGST and Central Excise, Navi Mumbai Shri Prabhat Kumar.

This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the fraudsters and tax evaders who are creating unhealthy competition for compliant taxpayers and defrauding the Government exchequer. As a part of this drive, Navi Mumbai Commissionerate has detected tax evasion of more than Rs 450 Crore, recovered Rs. 20 crores and arrested 12 persons recently.

The CGST Mumbai Zone is using data analytics tools to identify tax evaders. By using data analysis and network analysis, the officers of CGST Mumbai zone have booked more than 625 tax evasion cases, detected tax evasion of Rs. 5500 Crore, recovered Rs. 630 Crores and arrested about 50 persons, in the last five months. The CGST department is going to intensify its drive against the fraudsters and tax evaders which are causing unfair competition with honest taxpayers and defrauding the government exchequer of its rightful revenue in the coming days and months.

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