Man arrested in Delhi for input tax credit fraud of Rs 38.91 crore

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New Delhi: The officers of the Central Goods and Service Tax (CGST) Commissionerate, Delhi East have arrested a man for the Input Tax Credit (ITC) fraud of Rs 38.91 crore.

In the ongoing drive to counter the menace of fake billing operators, information from analytics tool NETRA (Network Exploration Tool for Revenue Augmentation), was developed by the officers of CGST Commissionerate, Delhi East to unearth a network of fictitious firms used to generate and pass on fake ITC of GST.

The investigation revealed that the multilayered network was being operated by one Nihaluddin who has confessed to having created a fake firm in his own name and also arranging ITC from 38 other fictitious firms on a commission basis to pass on fake Input Tax Credit to multiple beneficiaries. 

The investigation has so far established the issuance of fake bills of Rs 216.06 crore involving fake Input Tax Credit of Rs 38.91 crore, which is expected to increase as the investigation progresses.

The offence committed by the accused is covered under Section 132(1)(b) of the CGST Act, 2017 which is cognizable and non-bailable offences as per the provision of Section 132(5) and punishable under clause (i) of subsection 1 of Section 132 of the Act ibid. 

Accordingly, Nihaluddin was arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on March 1 who remanded him to judicial custody of 14 days. Further investigation into the case is underway.

Notably, according to the Ministry of Finance, since the inception of GST Central Tax, Delhi Zone has made 28 arrests in various cases involving GST evasion amounting to more than Rs 4058.86 crore.