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Four Persons Arrested for Availing Rs 408 Crore-worth Fictitious Input Tax Credit in Mumbai

Image for representation.

Image for representation.

The arrests were made after it was found that the accused have availed and utilised as well as passed on fictitious Input Tax Credit (ITC) amounting to a total of Rs 408.67 crore on the strength of invoices received and issued without any supply of goods or services, it said in a statement.

Mumbai: Four top officials of various private enterprises have been arrested for allegedly availing fictitious input tax credit to the tune of Rs 408.67 crore in three separate cases, the Directorate General of GST Intelligence said on Wednesday. The arrests were made after it was found that the accused have availed and utilised as well as passed on fictitious Input Tax Credit (ITC) amounting to a total of Rs 408.67 crore on the strength of invoices received and issued without any supply of goods or services, it said in a statement.

Those arrested include director of Rane Megastructures, proprietor of ACS Hardware and Networking, director/promoter of Keshariya Metal and managing director of Shailaja Commercial Trade Frenzy, it said, without revealing their names. The arrests were made by the Mumbai Zonal Unit of Directorate General of GST Intelligence on Tuesday.

It can be noted that the input tax credit facility is kept to avoid doubling of taxes and submitting the same claims generally helps a firm reduce the overall tax outgo. ACS Hardware and Networking fraudulently claimed ITC of approximately Rs 85.38 crore, and the same amount was passed on to Rane Megastructures on the strength of invoices having taxable value of Rs 474 crore without any supply, the statement said.

Rane Megastructures further passed on ITC of approximately Rs 85.44 crore to another company, without any actual supply. "In this cartel, bogus ITC has been passed on in a linear manner, in which ultimate beneficiary has availed and utilised ITC either for payment of their output tax liability or taking refund of unutilised ITC," the statement said, adding that a few arrests had been done earlier.

In another case, a group of companies, including Keshariya Metal, Kajal Trading Co, Hi-Tech Impex, Gravity Alloys and Sunshine Impex, was found to be involved in creating fictitious invoices with an aim to avail and pass on ineligible ITC on the strength of only invoices, without any supply of goods or services, as per the statement. They had availed and passed on ITC cumulatively amounting to Rs 103.78 crore in a fraudulent manner, without any supply of goods or services, it added.

In a separate case, it was found that Shailaja Commercial Trade Frenzy was involved in issue and receipt of bogus invoices resulting in fraudulent availment of ITC amounting to Rs 48.69 crore on the strength of invoices without any supplies with the intent of inflating the turnover. The accused were arrested under the relevant sections of the Central Goods and Services Act, 2017 and have been remanded to judicial custody till November 24, the statement said.

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