CGST busts fake input tax credit of Rs 15.23 cr

The Central Goods and Services Tax (CGST), Mumbai, has busted a fake GST input tax credit (ITC) racket and arrested the proprietor of a Malad-based firm. The firm was allegedly involved in fraudulent availment and passing of the ITC of Rs 15.23 crore without receiving or supply of goods, in violation of the provisions of CGST Act.

Acting on a tip off from the central intelligence unit of the CGST, an investigation was initiated against M/s Pacific Pharma, which deals in trading of chemicals. CGST Mumbai Zone has found that bogus bills of around Rs 105 crore were issued for this tax fraud. The owner of the firm was arrested and produced before the court on Thursday. The Magistrate has remanded him to 14 days judicial custody. This operation is a part of efforts by CGST Mumbai Zone to stamp out fake ITC networks and tax evaders. The CGST officers are using data analysis and network analysis tools to identify potential fraudsters. In a separate case, while analyzing a group of newly registered taxpayers by comprehensive analytic tools of Maharashtra GST, the department noticed a suspicious business activity amounting to more than Rs 200 crore of some taxpayers.

These taxpayers are M/s Empire Enterprises, M/s Shankar Enterprises & M/s. MM Enterprises. Thereafter, raids were conducted at their various business premises in Ulhasnagar on April 25 by Maharashtra state GST.

At the time of investigation visit, it was found that all these taxpayers had obtained GST registration by providing fake documents without knowledge of premise owners.

These taxpayers circulated bogus invoices of taxable value at Rs 218.26 crore to other taxpayers without supplying any goods or services and thus they passed on ITC at Rs 39.28 crore to their beneficiaries. Three persons have been arrested in the said case.

The Central Bureau of Investigation (CBI) has arrested a superintendent and an inspector, both of Central Goods & Services Tax (CGST), Jaisingpur, Kolhapur district, in a bribery case of Rs 50,000. Searches were conducted at the premises of both the accused at Jaisingpur and Kolhapur which led to recovery of incriminating documents, officials said.

The accused persons have been identified as Mahesh Nesarikar, superintendent, CGST and Amit Kumar Mishra, inspector, CGST.

According to the CBI, a case was registered on Thursday against the accused on a complaint. "It was alleged that the Superintendent had demanded undue advantage of Rs 75,000 from the complainant through his tax consultant to settle the matter regarding his service tax liability for the year 2017-18 to 2020-21. It was further alleged that both the accused negotiated the bribe amount with the complainant and his tax consultant and fixed the same as Rs 50,000," the agency claimed in a statement.

The CBI laid the trap and Mishra was caught while accepting the bribe of Rs 50,000 from the complainant. Later, Nesarikar was also arrested.