The officers of the Central Goods and Services Tax (CGST) Commissionerate, Delhi East, unearthed a multi-layered network of fictitious firms that were being used to generate and pass on fake input tax credit (ITC). It is a part of the ongoing drive of the Commissionerate against availment of inadmissible ITC.
Through the use of extensive data analytics, the officers identified and searched 21 premises, between January 15 and January 17, which led to the unraveling of a network of fake firms that were operating since 2017 to pass on fake ITC.
According to the officials, the network of fake firms was being operated by one Arvind Kumar. The official press release said that Kumar used to pass fake ITC for a commission of 4 to 4.5 per cent of the invoice amount.
The investigation conducted thus far has revealed 46 firms to be fictitious, which were being controlled by Kumar and his associates. These firms had no business activity and had been created solely for the purpose of passing on fake ITC, the release said.
The total fake ITC quantified so far amounts to Rs 82.23 crore generated out of the fake billing to the tune of Rs 541.13 crore. The amount is expected to increase as the investigation progresses, it said.
Arvind Kumar was arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on January 17. He was sent to judicial custody of 14 days till January 31. Further investigation in the case is under progress, the release said.
It is pertinent to mention here that since the inception of the GST Central Tax, the Delhi Zone has made 19 arrests in various cases involving GST evasion. All these cases involved evasion amounting to more than Rs 3,766 crore.
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