One held in Delhi for input tax credit fraud of Rs 50.03 crore

The arrested person named Vishal started the GST fraud by the creation of a fictitious firm in his own name which he got registered at his residence. He was produced before the Duty Magistrate on Sunday who remanded him to judicial custody of 14 days till March 13.

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New Delhi: A man has been held in Delhi for an Input Tax Credit (ITC) fraud of Rs 50.03 crore, the Ministry of Finance said on Sunday (February 28, 2021). The arrest came after the officers of the Central Goods and Services Tax (CGST) Commissionerate, Delhi East unearthed a network of fictitious firms used by their operator to generate and pass on fake ITC of Goods and Services Tax (GST). 

The network of fake firms was being operated by a person named Vishal, who is an advocate by profession and was practising law in the Karkardooma Court, Delhi.

Vishal masterminded a deep-rooted criminal conspiracy to defraud the Government and knowingly committed offences specified under Section 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132(5) and punishable under clause (i) of subsection 1 of Section 132 of the Act ibid. 

He has been arrested under Section 69(1) of the CGST Act, 2017 and was produced before the Duty Magistrate on Sunday who remanded him to judicial custody of 14 days till March 13. 

He started this GST fraud by the creation of a fictitious firm in his own name which he got registered at his residence. 

Subsequently, he arranged various KYCs of different persons to create multiple fictitious firms having no business activity and created solely for the purpose of passing on fake Input Tax Credit and defrauding the Government exchequer. Multiple KYCs and cheques were resumed during the search of his residence. 

He used to pass on fake Input Tax Credit to his clients in exchange for a commission of 2% of the invoice amount. 

"The total fake Input Tax Credit passed on quantified so far is Rs 50.03 crore which is expected to increase as the investigation progresses," said the Ministry of Finance.

Further investigation in the case is in process.

Notably, since the inception of GST Central Tax, the Delhi Zone has made 27 arrests in various cases involving GST evasion amounting of more than Rs 4019.95 crore.