CGST Mumbai Zone busts ₹140 cr fake GST invoice racket

Thane CGST officers busted a ₹140 crore fake GST invoice racket led by Mahamad Sultan Kapadiya, who created 18 dummy firms for fraudulent ITC claims.

MUMBAI: The officers of the Thane Central Goods and Service Tax (CGST) Commissionerate, under the CGST Mumbai Zone, busted a fake GST invoice racket involving fraudulent transactions worth ₹140 crore on Tuesday. The operation was designed to avail fraudulent Input Tax Credit (ITC) amounting to ₹26.92 crore.

CGST Mumbai Zone busts ₹140 cr fake GST invoice racket

Following an investigation, Mahamad Sultan Kapadiya, a Mira Road East resident, was identified as the mastermind behind the racket, CGST said in a release issued on Wednesday. He allegedly created a network of fake firms to generate fraudulent invoices and illegally pass on ITC without supplying goods or services.

The investigation revealed that he created and managed 18 dummy entities to facilitate proxy and dummy transactions. The release said these entities, including Royal Enterprise, Saraswati Enterprises, Lucas Infratrade LLP, and Maruti Trading, were established solely to defraud the government.

Kapadiya paid individuals to obtain their Aadhaar, PAN, and other KYC documents. He then misused these credentials to fraudulently secure GST registrations and open bank accounts in the names of the fake firms, the release said. It added that in the statements recorded under Section 70 (summon any person before them to provide evidence in the form of documents regarding any specific matter) of the CGST Act, 2017, the accused admitted to availing and passing on fraudulent ITC.