GST officers bust Rs.34 crore input tax credit fraud on specific inputs

Fraudulent entities generate GST value of about Rs.220 crores and an inadmissible amount of Rs.34 crores

November 14, 2021

Input tax credit fraud of Rs.34 cr through bogus GST invoices unearthed

The Finance Ministry mentioned on Sunday that the GST officers have unearthed Rs.34 crore input tax credit (ITC) fraud that involved seven corporations.

These entities have generated goods-less GST invoices of value about Rs.220 crore and passed inadmissible ITC amounting to around Rs.34 crore.

Rishabh Jain, the mastermind behind the fraud, created seven corporations to generate bogus GST invoices, with an intent to go on fraudulent input tax credit (ITC) without precise motion of items and without paying items and Services Tax (GST) to the federal government.

The modus operandi involved creating multiple firms with the intent to avail/ utilize and pass on inadmissible credit. The firms involved in this network are Blue Ocean, Highjack Marketing, Kannha Enterprises, SS Traders, Evernest Enterprises, Gyan Overseas, and Viharsh Exporters Pvt Ltd.

Upon receiving a specific tip-off, officers of the Anti Evasion Branch of Central Goods and Service Tax (CGST) Commissionerate, Delhi (East) have unearthed a case of availment/ utilization and passing on of inadmissible input tax credit (ITC), through bogus GST invoices without actual movement of goods, of about Rs.34 crore.

The officials said that Jain has tendered his voluntary statement admitting his guilt. He admitted that due to non-payment against overdraft accounts of the Central Bank of India, the business premises were sealed by bankers. Thereafter, he indulged in the issuance of bogus GST invoices without actual movement of goods.

Jain has knowingly and intentionally committed offences under Section 132(1)(b) of the CGST Act, 2017 which is cognizable and non-bailable offences as per the provisions of Section 132(5) and are punishable under clause (i) of the subsection (1) of Section 132 of the Act ibid.

Jain was arrested under Section 132 of the CGST Act on November 13 and sent to judicial custody by the duty Metropolitan Magistrate till November 26, the department said.

[With Inputs from IANS]

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