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Two proprietors of firms were held for input tax credit fraud worth more than Rs 20 crore

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Officials of the Central Goods and Services TAX (CGST) commissionerate have arrested two proprietors of firms based in Bhiwandi in Maharashtra’s Thane district for allegedly fraudulently availing Input Tax Credit (ITC) collectively worth more than Rs 20 crore.

The arrests were made on Thursday after the fraudulent activities of the two firms were unearthed, the CGST Bhiwandi commissionerate in the Mumbai zone said.

With their arrest, the Bhiwandi commissionerate has so far held 16 persons in such crimes in the last one year, it said.

The officials busted a fake GST invoice racket, which was used to avail and pass on fake ITC of around Rs 18 crore on bogus invoices of Rs 41 crore. The proprietor of M M Buildcon/ Lambodar Buildcon was arrested under the CGST Act, it said in a release.

“Acting on specific inputs, the anti-evasion wing of the CGST Bhiwandi Commissionerate initiated an investigation against the firm.

During the probe, the firm was found to be non-existing and fake. The proprietor said that he had vacated the registered premises/godown in 2018,” it added. Even after vacating the premises, the firm continued to use the same address in all transactions, including sales and purchases, the commissionerate said.

Based on material evidence gathered during the investigation, the proprietor of the firm was arrested and sent to judicial custody till August 30, it said. This is the 16th arrest by CGST Bhiwandi Commissionerate in the last one year.

In the second case, the commissionerate busted a fake GST invoice racket involving Vishwakarma Enterprises, which was found to have availed ineligible ITC of Rs 2.57 crore through bogus invoices of Rs 14.30 crore.

The proprietor of the firm was the 15th person to be arrested by the Bhiwandi commissionerate, it said. “Acting on specific inputs, the anti-evasion wing initiated an investigation against the firm and it was found that the principal place of business was residential premises and the taxpayer has availed ineligible ITC of Rs 2.57 crore,” the release said.

Following his arrest, the accused was released on bail by the Bhiwaandi commissionerate.

This case is a part of the special drive launched by the CGST Mumbai Zone against tax fraudsters and fake ITC networks. 

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