India: GST officers arrest one for operating 46 fake firms, passing on ITC worth Rs 82.23 crore

The Finance Ministry said on Monday, GST officers have arrested one person for operating 46 fake firms and passing on fake input tax credit (ITC) worth Rs 82.23 crore.

The officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi East unearthed a multi-layered network of fictitious firms being used to generate and pass on fake ITC.

The network of fake firms was operated by Arvind Kumar, who used to pass fake ITC for a commission of 4 to 4.5 per cent of the invoice amount. The investigation conducted so far has revealed 46 firms to be fictitious, which were being controlled by Kumar and his associates. These firms had no business activity and had been created solely for the purpose of passing on fake ITC.

The ministry said, The total fake ITC quantified so far is Rs 82.23 crore generated out of the fake billing of Rs 541.13 crore which is expected to increase as the investigation progresses.

Through the use of extensive data, officers identified and searched 21 premises between January 15-17, leading to the unravelling of a network of fake firms that were operating since 2017 to pass on fake ITC.

Kumar was arrested by GST officers and has been remanded to 14 days judicial custody till January 31.