Man arrested for running network of fictitious firms to help businesses evade GST: Officials

Investigation conducted so far has revealed 46 firms to be fictitious which were being controlled by Kumar and his associate.

A man has been arrested for allegedly running a multi-layered network of fictitious firms for generating fake input tax credit (ITC) worth crores of rupees to help businesses evade GST, according to an official statement on Monday.

Arrested computer hacker and cyber criminal with handcuffs, close up of hands (Getty Images/iStockphoto)

The Central Goods and Services Tax (CGST) Commissionerate in east Delhi arrested the man and said the total fake ITC quantified so far is ₹82.23 crore generated out of fake billing to the tune of ₹541.13 crore, which is expected to increase as the investigation progresses.

"The network of fake firms was being operated by one Arvind Kumar who used to pass fake ITC for a commission of 4 to 4.5% of the invoice amount," said the statement issued by the CGST Delhi East Commissionerate.

Investigation conducted so far has revealed 46 firms to be fictitious which were being controlled by Kumar and his associates, it said.

“These firms had no business activity and had been created solely for the purpose of passing on fake ITC,” the statement said.

Through use of extensive data analytics, officers identified and searched 21 premises between Friday and Sunday, which led to the unravelling of a network of fake firms that were operating since 2017 to pass on fake ITC, it said.

Kumar was arrested and produced before a court on Sunday, which remanded him in judicial custody of 14 days till January 31, the statement said.

The central GST, Delhi Zone has so far made 19 arrests in various cases involving tax evasion of over ₹3,766 crore, it said.