Two persons including a businessman were arrested in Madhya Pradesh for an alleged 12 Crore Rupee Goods and Service Tax (GST) fraud using fake invoices to claim Input Tax Credit (ITC).
In Madhya Pradesh’s Indore, the authorities have apprehended the proprietor of a private firm and another individual for their involvement in an alleged case of utilizing counterfeit invoices to fraudulently obtain input tax credit amounting to over Rs 12 crore under the Goods and Services Tax (GST) system. Sources from the Central GST Commissionerate disclosed this information today.
The firm, which specializes in the procurement and trade of food grains, purportedly submitted counterfeit invoices to claim an input tax credit exceeding Rs 12 crore, as stated by the official.
The co-accused, in collusion with a broker based in Gujarat, allegedly supplied fabricated invoices from fictitious firms to the firm’s owner.
The individual associated with the Gujarat broker provides forged invoices while receiving a commission. The same individual had previously been arrested in a similar case of GST fraud in 2021, the official noted, highlighting that a comprehensive investigation is currently underway in the present matter.
Input Tax Credit frauds are at the highest number ever. Recently, The Directorate General of GST Intelligence (DGGI) has launched an investigation into over 16 insurance companies for fraudulent Input Tax Credit (ITC) claims.
The department has issued GST summons to several companies in the past two weeks, seeking more information. The authorities are expanding their investigation into the fake invoicing case, which covers more than 120 intermediaries and aggregators in the insurance sector across India. They have requested signed agreements with insurance companies, cumulative input tax credits from FY 2018-19, and documentation showing the rendering of services.
The GST authorities had identified irregularities in commission payments to brokers and intermediaries across the sector.
On March 22, 2023, Mr. Mahendra Kumar Rawat, the Authorized Signatory and Manager-Finance & Accounts of M/s. Oppo Mobiles India Private Limited, was apprehended by the Anti-evasion wing of CGST Bhiwandi Commissionerate for engaging in fraudulent practices to obtain Input Tax Credit (ITC) amounting to Rs. 19 crore.
The officers from CGST Bhiwandi Commissionerate in Mumbai Zone took Mr. Rawat into custody, and he is scheduled to remain in judicial custody until April 3, 2023. Mr. Rawat’s arrest was made under section 69 of the CGST Act, 2017, for violating section 132 of the same act. Following an investigation by CGST Bhiwandi Commissionerate, it was revealed that M/s. Oppo Mobiles India Private Limited had been involved in the fraudulent acquisition of ITC without any actual receipt of goods.
Such a high number of Input related tax-crimes demand immediate attention and quick action from the authorities and the Central and State Governments.
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