Director of Borivali firm arrested for ₹15 crore GST fraud

Mumbai: The Central Goods and Services Tax (CGST) department has arrested the director of a Borivali-based company for allegedly causing a revenue loss of ₹15

Mumbai: The Central Goods and Services Tax (CGST) department has arrested the director of a Borivali-based company for allegedly causing a revenue loss of ₹15.26 crore by availing Input Tax Credit (ITC) on fake documents.

Director of Borivali firm arrested for ₹15 crore GST fraud

The accused, Fahim Ahsan Shaikh, 51, is the director of Corvette Tradelink Private Limited. The department alleged that Shaikh knowingly indulged in availing ITC based on fake invoices issued by non-existent suppliers. The accused has fraudulently availed ITC on the strength of invoices issued by at least 10 different fake entities, CGST officers said.

The input tax credit allows taxpayers to claim credit for taxes paid on purchase. Issuance of an invoice or bill without supply of goods or services and wrongful availment or utilisation of the Input Tax Credit on a bill/invoice, without any supply of goods or services, is a cognisable and non-bailable offence.

Shaikh was under the department’s scanner for about three to four years. CGST officers said Shaikh, in his previously recorded statements to the department, explicitly mentioned that he was in charge of all the affairs of the firm and that he looked after finance, purchase, sales and all other matters of the company.

This showed that he was fully aware of the fact that no goods or services were being supplied by the suppliers along with their invoices and the accused had deliberately, intending to avail inadmissible credit and to enable himself to avail export benefits on invoices, gave effect to these transactions, officials added.

“The accused has committed an offence under relevant sections of the Central Goods and Services Tax Act, 2017 by fraudulently availing ITC amounting to ₹15.26 crore,” advocate Shyamrishi Pathak, who represented CGST, informed the Esplanade court, where Shaikh was produced after his arrest. The accused has been remanded to 14 days of judicial custody.