IT Correspondent
Mumbai, Nov 11:
The Anti Evasion cell of the Central Goods and Service Tax (CGST) arrested two businessmen from Mumbai, for claiming the Input Tax Credit (ITC) worth Rs 40.08 crore based on fake invoices.
In the first case the “Iron Allegiance” located at Kurla West in North Central Mumbai had claimed ineligible credit worth Rs 24.08 crore based on the fake invoices. Its proprietor Mohammed Harish Khan availed the ITC on the basis of invoices to 18 non-existing firms. He was arrested and sent to judicial custody till November 14, 2021 by the Additional Chief Metropolitan Magistrate.
In the second case the “Ayesha Metals works”, located at Chandivali, Powai in North Central Mumbai claimed the ITC worth Rs 16.76 crore. Its proprietor Atif Ahmed Shaikh had issued invoices by 20 suppliers. Some of the suppliers were found to be non-existing companies. He too was arrested and sent to judicial custody till November 14,2021.
The raids were conducted under direction of Milind Gawali, Principal Commissioner, CGST, CX, Mumbai East Commissionerate. The arrests were made under sections 132(1) (B)(C) read with section 69 of CGST Act 2017.
Iron industry players in Mumbai zone under lens over input tax credit frauds since more and more frauds are being unearthed. Last year 11 cases were registered by the Mumbai zone of CGST, for availing fraudulent ITC via fake invoices linked to firms dealing in the iron and steel industry. In all 20 persons were arrested, for showing supply of goods worth Rs 10,000 crore and claiming GST payment of Rs 1,971 crore.
In the year-long crackdown on tax evasion, the GST authorities have unearthed over Rs 35,000 crore of tax fraud committed by misuse of ITC provision under the Goods and Services Tax (GST) regime, across the country.
Under the GST regime, at the time of paying tax on output, entities can reduce the tax they have already paid on inputs. However this provision is being misused by creating fake invoices on inputs.
The field formations of the Central Board of Indirect taxes and Customs (CBIC) have been regularly detecting such cases from the very beginning of the GST regime. During 2020-21 (April 2020 to March 2021), 426 persons, including 14 professionals such as CAs, lawyers and directors, were arrested.
In view of the high proportion of fake ITC availment and utilisation, a nationwide special drive against the fake GST invoice was launched from November 9, 2020 onwards which is still continuing, However due to the serious Covid-19 pandemic spread and related safety concerns, the drive slowed down.
But now with gradual lifting of lockdown and improved Covid-19 situation in different parts of the country, the department has resumed the drive in coordinated action at national level.
The crack-down by Directorate General of GST Intelligence and all the Central GST formations against the fraudsters responsible for causing loss to the government exchequer has gained momentum during this month, a CBIC said in a statement.