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May 2, 2022

Fake input tax credit racket of over Rs 15 crore exposed by CGST officials

by CA Shivam Jaiswal in GST

Fake input tax credit racket of over Rs 15 crore exposed by CGST officials

The CGST Commissionerate, Mumbai West Zone, exposes a Rs. 15.23 crore bogus GST Input Tax Credit. The Mumbai West Zone of the Central Goods and Services Tax (CGST) Commissionerate has busted a fraudulent GST Input Tax Credit (ITC) racket and arrested the owner of a Malad-based enterprise. In violation of the provisions of the CGST Act, 2017, the firm was involved in the fraudulent availment and passing of Input Tax Credit (ITC) of Rs 15.23 Crore without receiving or supplying products. An investigation was launched against M/s Pacific Pharma, which specialises in chemical trafficking, on a tip from the Central Intelligence Unit of the CGST Mumbai Zone. For this tax scam, the CGST Mumbai Zone discovered that phoney bills totaling roughly Rs. 105 crore were produced.

On the 28th of April 2022, the firm’s owner was arrested under Section 69 of the CGST Act, 2017 for violating Section 132 of the CGST Act, 2017 and appeared before the Additional Chief Metropolitan Magistrate, Esplanade. He has been remanded in judicial custody for 14 days by the Magistrate. More research is being carried out. This action is part of the CGST Mumbai Zone’s efforts to combat bogus ITC networks and tax evaders who have been infringing on the rights of honest taxpayers and robbing the government. As a result of these efforts, the CGST, Mumbai West Commissionerate has found false ITC worth Rs.465.75 crore, recovered Rs. 35.57 crore, and arrested five people in the last six months. Data analysis and network analysis are used by CGST officers. During this fiscal year, the Department will step up its efforts to catch tax evaders.

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