Rs 17 crore GST fraud detected in Delhi, 2 arrested

The Central Goods and Service Tax (CGST) Delhi South Commissionerate busted a racket in which firms were fraudulently claiming Input Tax Credit to the tune of Rs 17 crore through fake invoices, according to an official statement.

Officials got specific intelligence inputs concerning certain bogus firms that were created solely for the purpose of generating fake invoices to claim input tax credit.

Inspections were conducted at the registered premises of three bogus companies namely M/s. NexGen Busicorp, M/s. XEL Informatics and M/s. GW Infotech Pvt. Ltd. registered in the jurisdiction of CGST Delhi South Commissionerate that were engaged in fake invoicing and circular trading.

Incriminating documents were recovered from the premises of these companies.

A preliminary enquiry conducted so far into the transactions of these firms has revealed tax evasion of around Rs 17 crore. The proprietors in their confessional statements have admitted their role in availing fraudulent input tax credit without any underlying supply of goods.

The persons behind these bogus firms have defrauded the government exchequer and committed offences specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and non-bailable.

Two persons Sanjay Kumar Srivastava and. Sunil Gulati were arrested on Friday in connection with the fraud. The accused were produced before the Duty Metropolitan Magistrate following which they have been remanded to judicial custody for 14 days.

Further investigation is in progress.