The Anti-Evasion Branch of the Central Goods and Services Tax (CGST), Delhi South Commissionerate has arrested a director of a private limited company involved in smartphone trading for allegedly fraudulently availing Input Tax Credit (ITC) worth Rs 60.59 crore using bogus invoices totaling Rs 397.23 crore. The investigation revealed that the supplier entity operated from a co-working space and had no genuine business activity, inventory, or financial records supporting the claimed transactions. Authorities found no verifiable payment trail for the alleged supply of goods, indicating that the invoices were created solely to pass on fraudulent ITC. The offence violates Section 16 and attracts penalties under Section 132 of the Central Goods and Services Tax Act, 2017. The accused was produced before a magistrate and remanded to 14 days of judicial custody. Officials stated that the CGST Delhi South Commissionerate has already initiated prosecution against 45 fraudsters in the current fiscal year as part of its ongoing crackdown on fake ITC claims.
Official copy of the Press Release is as follows
CGST Delhi South Commissionerate arrests director of a company for fraudulent availment of Input Tax Credit (ITC) amounting to Rs 60.59 crore through bogus invoices of Rs 397.23 crore
As part of its ongoing enforcement drive against fraudulent Input Tax Credit (ITC) claims, the Anti-Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate, has arrested a Director of a private limited company engaged in trading of Smartphones for fraudulent availment of Input Tax Credit (ITC) amounting to Rs 60.59 crore through bogus invoices of Rs 397.23 crore. This violates Section 16 of the CGST Act, 2017 and is punishable under Section 132 .
Analysis of GST return data and verification of the declared place of business of the supplier entity revealed that the premises was merely a co‑working space and no books of accounts, stock, invoices or any evidence of genuine business activity was found.
During the course of investigation, the director failed to provide satisfactory explanation regarding the operations of the said firm and the mode of payment for the alleged transactions. No verifiable trail of payment corresponding to the purported supply of goods has been established so far, which further indicates that the transactions are non‑genuine paper transactions created solely for fraudulent passing and utilisation of Input Tax Credit.
The arrested director was found to be direct benefactor of this evasion. The offence is covered under Section 132(1)(c) and is punishable under Section 132(1)(i) of the CGST Act, 2017. The person arrested was produced before the Duty Magistrate and has been remanded to judicial custody for 14 days.
Further, CGST Delhi South Commissionerate, in the current fiscal year, has already launched prosecutions against 45 fraudsters under the CGST Act, 2017.
CAclubindia
