The initial investigation revealed that firm had fraudulently claimed and passed on Input Tax Credit (ITC) of Rs 11.4 crore without actual supply or receipt of goods. The proprietor of the firm, confessed to the bogus billing and running of fake ITC racket. He was arrested on January 21, 2022 under Section 69 of CGST Act, 2017. The amount of fake ITC involved is likely to go up during the ongoing investigation once the entire network is investigated. The roots of this network are spread across the cities of Nagpur, Pune, Delhi and Nasik apart from Mumbai and Thane. At this stage, it seems that around 25 entities are part of this network. Jurisdictional Commissionerates are being informed to initiate legal action against the firms falling in their jurisdiction, the ministry said. This operation is a part of efforts by CGST Mumbai Zone to eradicate fake ITC networks, which have been vitiating the healthy economic ecosystem of the country and defrauding the Government exchequer. This is the sixth arrest by Bhiwandi Commissionerate in the last 6 months.
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According to the Finance Ministry, a businessman who was conducting a bogus GST Input Tax Credit scheme was detained by the Bhiwandi Commissionerate of the CGST Mumbai Zone on Saturday. “Acting on intelligence from the Mumbai CGST Zone’s Central Intelligence Unit, the officers launched a coordinated operation in Thane, Bhiwandi, Raigad, and Mumbai and discovered GST evasion of Rs 11.4 crore through the generation and passing of fake ITC through an intricate web of bogus billing totaling more than Rs 63 crore,” the ministry said in a statement. The search was conducted at M/s. Adarsh Scrap Traders’ Bhiwandi-based business premises, which was engaged in bogus invoicing, availment, and passing on of phony ITC, thereby robbing the government exchequer of its due GST money.