Central GST arrests three businessmen in fake invoice case

The officials said further investigation in the matter is in progress and more people involved in the case will be arrested soon.

Continuing its crackdown on tax evaders, the commissioner of goods and service tax (GST) in Gurugram arrested three businessmen, including one from Delhi, for fraudulently claiming an input tax credit (ITC) of over ₹5.7 crore, on Tuesday. This tax credit was earned on ₹31-crore invoice value; the invoices were issued by a non-existent firm, thus causing a loss to the exchequer.

Sanjay Mangal, commissioner, central GST-Gurugram, said they have arrested Anil Kumar of Hisar, Bhikaram of Delhi and Kuldeep Sharma of Sonepat. (Hindustan Times)

The officials said further investigation in the matter is in progress and more people involved in the case will be arrested soon.

Sanjay Mangal, commissioner, central GST-Gurugram, said they have arrested Anil Kumar of Hisar, Bhikaram of Delhi and Kuldeep Sharma of Sonepat. The accused had allegedly created a dummy firm—Palak International, registered in Sohna—using fake documents and raised invoices to evade GST. The fake firm issued multiple invoices together valued at ₹31 crore with a GST component of ₹5.70 crore, the official; said.

“This company was registered using fake documents of a person identified as Jitender Kumar for the purpose of issuing numerous fake invoices without any concomitant movement of goods for such transactions, thereby providing wrongful availment (of goods) and utilization of fake input tax credit,” Mangal said.

During investigation, the accused confessed to evading tax, officials said.

“The said firm passed on fraudulent input tax credit of ₹5.7 crore to various buyers who availed the same to discharge their GST liabilities against their outward supply with an ulterior motive to defraud the government exchequer,” Mangal said.

During the investigations conducted so far into the case, the GST and central tax-Gurugram, have recovered an amount of ₹3 crore towards the tax evaded.

The officials said the businessmen had committed offences under the provisions of Sections 132(1)(b) and (c) of the CGST Act, 2017, which is punishable under sections 132(1), (2) and (3) of the Act ibid and therefore the offence is cognizable and non-bailable under Section 132 (5) of the Act and liable to arrest under Section 69 of the Act.

The accused were produced before the court and sent to 14-day judicial custody, police said.