CGST Mumbai Commissionerate arrests Finance Head of a firm for GST evasion of Rs. 88 Cr

Supply of taxable service amounting to Rs. 492 Cr approximately without issuing tax invoice under GST Radar.
CGST - CGST Mumbai Commissionerate - CGST Mumbai - Finance Head - GST evasion - CGST Mumbai Commissionerate arrests Finance Head - taxscan

Recently, the Central Goods and Services Tax (CGST) Mumbai Zone, CGST Navi Mumbai Commissionerate, has apprehended the Head of Finance at Foodlink F&B Holdings India Pvt Ltd for an alleged Goods and Services Tax (GST) evasion of approximately Rs 88 crores. The arrest took place on 1st March 2024 as part of the ongoing investigation.

The accused company, M/s Foodlink F&B Holdings India Pvt Ltd, based in Mumbai, is accused of supplying taxable services amounting to Rs. 492 crores without issuing proper tax invoices, violating the provisions of Section 132 of the Central Goods and Services Tax Act, 2017. The said section deems the supply of goods and services without tax invoices as a cognizable and non-bailable offense when the tax amount involved exceeds Rs. 5 crores.

This arrest marks the second in connection with the case, with the Finance Controller of the company having been arrested in December 2023. The Finance Controller had confessed to participating in the illegal transfer and deposit of cash through a sophisticated modus operandi.

The illicitly obtained funds were then deposited into various undisclosed bank accounts, evading tax scrutiny by breaking the amounts into smaller transactions. Subsequently, the funds were further manipulated by being deposited under the guise of fake Business-to-Consumer (B2C) restaurant sales.

The First arrest in the case was made in December 2023, when the Finance Controller of the said company admitted his role in illegal transfer/deposit of cash, generated from the stated modus operandi in various bank accounts not declared in GST Registration, by breaking it into smaller amounts to avoid tax scrutiny and depositing in the name of fake B2C restaurant sale. This is the second arrest in this case.

The Finance Head was apprehended in Ahmedabad, Gujarat, and was promptly presented before the nearest Magistrate who granted transit remand. Following this, the accused was produced before the jurisdictional Magistrate, who remanded them to judicial custody until 12th March 2024.

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