GST Commissionerate Arrests Smartphone Trader’s Director in ₹60.59 Cr ITC Fraud
Since the fraud exceeded ₹5 crore, it is punishable under Section 132(1)(i) with imprisonment up to 5 years and a fine.
In a major strike against tax evasion, the Central Goods and Services Tax (CGST) Delhi South Commissionerate has arrested the director of a private limited company trading in smartphones for fraudulent availment of Input Tax Credit (ITC) worth ₹60.59 crore. The fraud was committed through bogus invoices amounting to ₹397.23 crore, violating Section 16 of the CGST Act, 2017,...
In a major strike against tax evasion, the Central Goods and Services Tax (CGST) Delhi South Commissionerate has arrested the director of a private limited company trading in smartphones for fraudulent availment of Input Tax Credit (ITC) worth ₹60.59 crore.
The fraud was committed through bogus invoices amounting to ₹397.23 crore, violating Section 16 of the CGST Act, 2017, and punishable under Section 132.
The company’s declared business premises turned out to be a co‑working space, with no books of accounts, stock, or genuine records, and Verification revealed no payment trail for the alleged transactions, confirming they were non‑genuine paper deals created solely to pass on fake ITC.
The director failed to provide any credible explanation and was identified as the direct beneficiary of the fraud.
The offence falls under Section 132(1)(c) and is punishable under Section 132(1)(i) of the CGST Act.
Section 132(1)(c): This covers the offence of fraudulently availing Input Tax Credit (ITC) without actual receipt of goods or services. In simple terms, it means claiming tax credits based on fake or non-existent transactions, often using bogus invoices.
Section 132(1)(i): This specifies the punishment for such offences when the amount of tax evaded or ITC wrongly availed exceeds ₹5 crore. The punishment is imprisonment for up to 5 years and a fine. This provision is heavily used in cases involving fake invoice rackets and fraudulent ITC claims, often resulting in arrests and judicial custody.
The arrested director has been remanded to judicial custody for 14 days. This arrest is part of CGST Delhi South’s ongoing enforcement drive. In the current fiscal year alone, the Commissionerate has launched prosecutions against 45 fraudsters under the CGST Act.
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