The Central Goods and Service Tax (CGST) Delhi South Commissionerate has successfully busted a fraudulent input tax credit (ITC) racket worth ₹17 crore.
The officers of the commissionerate developed intelligence regarding bogus firms that were created solely for the purpose of generating goods less invoices and passing on of ineligible input tax credit along the chain.
Inspections at the registered premises of three bogus firms
M/s. NexGen Busicorp, M/s. XEL Informatics, and M/s. GW Infotech Pvt. Ltd. – were conducted in the jurisdiction of CGST Delhi South Commissionerate that were engaged in fake invoicing and circular trading. Incriminating documents were resumed from the premises of the taxpayers.
Preliminary enquiry reveals tax evasion of Rs. 17 crore through fraudulent ITC
- Preliminary investigation revealed that these firms had evaded taxes worth Rs. 17 crore through passing and availing fraudulent ITC without any underlying supply of goods.
- The Proprietor/Director of the firms has admitted his role in the fraudulent activity.
- The fraudulent ITC committed by these bogus firms is an offence specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and non-bailable.
Arrests Made in Connection to the Fraudulent ITC Racket
Two persons – Sh. Sanjay Kumar Srivastava and Sh. Sunil Gulati – have been arrested on 17.03.2023 in connection to the fraudulent ITC racket. The accused have been produced before the Duty Metropolitan Magistrate and remanded to judicial custody for 14 days.
Further Investigation is Ongoing
- The busting of this fraudulent ITC racket by the CGST Delhi South Commissionerate serves as a warning to those who are involved in such activities.
- Further investigation is currently in progress, and it is expected that more details regarding the racket will come to light.
- The persons behind these bogus firms have defrauded the government exchequer and committed serious offences.
- The CGST Delhi South Commissionerate is committed to taking strict action against those who attempt to cheat the system and evade taxes.