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February 21, 2022

CGST Commissionerate, Belapur busts fake GST ITC racket of Rs. 81 crores

by CA Shivam Jaiswal in GST, Income Tax

CGST Commissionerate, Belapur busts fake GST ITC racket of Rs. 81 crores

As part of a special Anti-Evasion drive launched by CGST Mumbai Zone, CGST Commissionerate, Belapur arrested one of the Directors of M/s. Fantasia Trade Pvt. Ltd., Navi Mumbai for availing and passing on of inadmissible fake Input Tax Credit of Rs.81 Crore by using bogus invoices of Rs.479 Crore.

Acting upon the intelligence developed by using Data Analytics tools, searches were conducted at various locations including business premises of the firm and the premises of its transporter. Certain incriminating documents were recovered and seized during the searches.

Investigation revealed that M/s. Fantasia Trade Pvt. Ltd. was acting on behest of M/s. Arch Pharmalabs Ltd., Mumbai and there was no movement of traded goods. 

On the basis of material evidences gathered during investigation it became clear that prima facie offence as specified in Section 132 of the Central Goods and Services Tax Act, 2017 was being committed with full disregard to the statutory provisions, with an intention to defraud the Government of its due revenue.

 The investigation revealed a cognizable and non-bailable offence of availment and utilisation of ineligible Input Tax Credit of Rs.81 Crore. Accordingly, by invoking the power under Section 69 of the CGST Act, Director of M/s. Fantasia Trade Pvt. Ltd was arrested on 18.02.2022 and produced before the magistrate on the same day, who has remanded him to Judicial custody for 14 days.

This operation is a part of efforts by CGST Mumbai Zone to eradicate fake ITC networks, which have been vitiating the healthy economic ecosystem of the country and defrauding the Government Exchequer. The CGST department is using data analytics and network analysis tools to identify tax evaders. As a part of special drive, the CGST Mumbai Zone has booked more than 730 cases of tax evasion, detected tax evasion of Rs. 6380 Crore, recovered around Rs. 700 Crore and arrested 56 persons, in the last six months. Department is going to intensify its drive against the fraudsters and tax evaders in the coming days and months.

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