Central GST evasion: Mumbai firm fined for using input tax credit on bogus invoices

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Officers from Bhiwandi Commissariat of Central Goods and Services Tax (CGST) in Mumbai area have accused a company of fraudulently using Input Tax Credit (ITC) on bogus invoices. An associate of the company was also arrested on Tuesday.

According to the officers, the company, M/s Laxmi Metal and Co, used ITC worth Rs 8.41 crore on fake invoices of Rs 45.22 crore.

“Based on the physical evidence gathered during the investigation, we found out that the company was dealing in the trading of ferrous and non-ferrous scrap. They fraudulently used ITC amounting to Rs. 8.41 crore on basis of fake/ineligible invoices of Rs 45.22 crore issued by non-existent/fake/inauthentic companies, which issued invoices to said company without movement of goods,” said Sumit Kumar, Commissioner of CGST Bhiwandi Commissariat, Zone from Mumbai.

A partner of the firm was arrested under article 69 of the CGST law of 2017 for breach of article 132 of the CGST law of 2017. He was brought before a magistrate’s court and placed in police custody until September 24.

This case is part of the special campaign launched by CGST Mumbai Zone against tax evaders and fake ITC networks. So far, CGST Bhiwandi police station has arrested 18 people in the past year.

“We use data analysis and network analysis tools to identify and trace potential fraudsters. CGST officers will intensify this campaign against tax evaders in the coming days,” Kumar said.

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