2 held by CGST Officials for ITC fraud of more than Rs 31.85 crore

2 held by Faridabad CGST Commissionerate for issuing fake invoices of over Rs 200 crore and availing involving fraudulent ITC of Rs 31.85 crore

Central Goods and Services Tax (CGST) Commissionerate, Faridabad, of Panchkula CGST Zone, on 23.02.2022 arrested two persons for running a fake billing racket, involving five (5) dummy firms, dealing in trading of iron scrap, registered in Faridabad, Haryana, for issuance of fake invoices of over Rs 200 crore without actual supply of goods and availing and passing fraudulent Input Tax Credit (ITC) amounting to Rs. 31.85 crore.

A team of officers of Anti-Evasion, CGST Commissionerate, Faridabad, conducted simultaneous searches at 5 places in Faridabad on 22^nd February, 2022. During the investigation, it was found that the said firms have been availing and passing on fraudulent Input Tax Credit based on bogus / fake invoices without actual supply of goods.

As per Section 132 of CGST Act 2017, issuance of an invoice or bill without supply of goods or services and wrongful availment or utilization of Input Tax Credit is a cognizable and non-bailable offence if the amount is over Rs. 5 crore.

Both the proprietors of the said firms have accepted that they have availed and passed on fraudulent ITC of Rs. 31.85 crore, without actual supply of goods to inter-state recipients and have accepted the total GST liability of Rs. 31.85 crore during initial investigation. The quantum may increase in future.

Therefore, both the accused have been arrested under Section 69 of Central Goods and Services Tax Act, 2017 for committal of offences under Section 132(1)(b), 132(1) (c) & 132 (5) of the CGST Act, 2017. They were produced before the CJM Court, Faridabad, on 23.02.2022 and were remanded to 14 days Judicial Custody.

Further investigation in the case is underway.