SpreadIt News | Digital Newspaper

In Maharashtra, a fake input tax credit racket worth 13 crore has been busted

On Saturday, a team from the CGST Commissionerate, Raigad, Mumbai Zone, uncovered a fraudulent GST input tax credit (ITC) scheme and arrested the proprietor of a Kalamboli-based business called Zaid Enterprises.
The company was involved in obtaining and passing on a false GST input tax credit of Rs 13 crore by utilising phoney invoices worth Rs 70 crore.

Based on a tip-off from the Central Intelligence Unit (CIU) of the CGST Mumbai zone, a team from the Anti-Evasion Wing of the CGST Commissionerate Raigad launched an investigation, which revealed that Zaid Enterprises had obtained fake ITC on the basis of bogus invoices issued by more than ten non-existent firms and passed this fake ITC to other firms, according to Neeraj Kansal, Commissioner, CGST and C.EX, Raigad.


On March 4, the accused was arrested under Section 69 of the Central Goods and Services Act, 2017 for committing offences under Section 132 of the same Act. He was brought before the Judicial Magistrate in Panvel and was sentenced to 14 days in judicial detention.

Officers had been keeping a close eye on the number of such phoney companies that had been mushrooming and functioning from a tiny neighbourhood in Taloja, Navi Mumbai, using prior trend analysis and data analytics techniques. They were registering for GST using fraudulent or stolen identities or for the express purpose of generating, obtaining, using, and passing on fictitious ITC.


In the fiscal year 2021-22, the CGST Raigad Commissionerate discovered approximately 700 crores in tax evasion, recovered 405 crores, and arrested nine people, according to the CGST.