Representational Image.
Representational Image.

Delhi-based man arrested for GST fraud of 38.91 crore

The person had created a fake firm under his name and was linked to a multilayered network of 38 other fictitious entities to dupe the government by claiming fake ITC through bogus bills, said the finance ministry in a statement
By HT Correspondent | Edited by Smriti Sinha
PUBLISHED ON MAR 02, 2021 04:47 PM IST

The government has arrested a Delhi-based man for issuing bogus Goods and Services Tax (GST) invoices worth over 216 crore to fraudulently claim 38.91 crore input-tax credit (ITC), a finance ministry statement said on Tuesday.

The person had created a fake firm under his name and was linked to a multilayered network of 38 other fictitious entities to dupe the government by claiming fake ITC through bogus bills, it said.

“The investigation has so far established the issuance of fake bills of 216.06 crore involving fake ITC of 38.91 crore, which is expected to increase as the investigation progresses,” it said.

The person was arrested and produced before the duty magistrate on Monday, who remanded him to judicial custody for 14 days until March 15. Raising fake bill and fraudulent claims of ITC is a cognisable and non-bailable offence under the section 132(1)(b) of the Central GST Act, 2017.

The officers of Central Goods and Service Tax (CGST) Commissionerate, Delhi East used analytics tool NETRA [Network Exploration Tool for Revenue Augmentation] to unearth the network of fictitious firms using fake bills to claim ITC, the statement said. So far, the zone has made 28 arrests in various cases involving GST evasion of over 4,000 crore.

Also Read | GST revenue hits 1 Lakh-crore for 5th month

The government, in mid-November, launched a nationwide drive against GST evasion through fake bills that saw arrests of over 330 people, including professionals, directors of companies and chartered accountants (CA).

According to a revenue department official, during the ongoing drive against GST invoice frauds, the Directorate General of GST Intelligence and CGST Commissionerate arrested 12 persons in a single day last week that included a CA.

Out of the 330 persons arrested so far, at least four are booked under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) while the GST intelligence and CGST authorities booked more than 3,200 cases against 9,600 fake GST registered entities, the official said, requesting anonymity.

The GST authorities have been using deep data analytics, integrated data-sharing and artificial intelligence (AI) tools to nab fraudsters. “The technology has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and their networking without any overreach and able to pinpoint the fraudsters with specific inputs to take targeted actions and further investigations against them,” he said.

The nationwide drive against fake GST invoice frauds has also helped in robust GST collections for five months in a row. The positive revenue growth for six months in a row, from September 2020, and over 1 lakh crore collections in five consecutive months show the resilience of the Indian economy and effective tax administration that improved compliance.

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