Fraud involving ITC of 33.57 crore by dealing in goods-less invoices unearthed

Acting an Intelligence received from PCCO, Vadodara Zone, officers of the Central GST & Central Excise, Surat Commissionerate have unearthed a Case of generation, availing, and passing of fraudulent ITC mode by an intricate Web of numerous Surat-based firms. Preliminary investigation so far has revealed the network of 13 firms dealing in goods-less invoices wherein total fraudulent ITC availed is Rs. 17.81 Cr. and passed on ITC amounting to Rs 15.76 Cr. Thus, the total ITC involved in the matter is Rs 33.57 Cr. Further investigation reveals that two such firms had the same address as the registered principal place of business, which was found to the residential premises of proprietors of the above firms. The proprietors are related as mother and son.

Both these firms are being operated by the son, supra, who has created these two bogus firms which were involved in the issuance of goods-less invoices for availing of fake ITC. He has further passed on such fraudulent ITC to various other taxpayers located in Gujarat, Rajasthan, and Delhi. Data analysis has revealed that so far these two firms have availed ITC to the tune of Rs. 6.70 Cr. and passed on ITC to the tune of Rs. 4.59 Cr.

The perpetrator has admitted to the same under his voluntary statement.

The evidence gathered during the investigation make it evident that the perpetrator has committed offense as provided under Section 132(1)(b), (c) and 132(5) of the CGST Act, 2017, which is punishable with imprisonment for a term which may extend to 5 years and with fine. Such offenses are cognizable and non-bailable and therefore, he has been arrested on September 07, 2021 under section 69 or the CGST Act, 2017.

Further investigation into the fake ITC racket is in progress.