Delhi advocate arrested for input tax credit fraud of Rs 50.03 cr

The officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi East have unearthed a network of fictitious firms used by their operator to generate and pass on fake Input Tax Credit (ITC) of Goods and Services Tax (GST), said Union Ministry of Finance.

The network of fake firms was being operated by Vishal, who is an advocate by profession and was practising law in Karkardooma Court, Delhi, the Ministry said in a press statement.

It said that Vishal started this GST fraud by the creation of a fictitious firm in his own name which he got registered at his residence.

Subsequently, he arranged various Know Your Customer (KYCs) of different persons to create multiple fictitious firms having no business activity and created solely for the purpose of passing on fake Input Tax Credit and defrauding the Government exchequer, it added.

Multiple KYCs and cheques were resumed during the search of his residence. He used to pass on fake Input Tax Credit to his clients in exchange for a commission of 2 per cent of the invoice amount. The total fake Input Tax Credit passed on quantified so far is Rs 50.03 crore which is expected to increase as the investigation progresses.

Vishal, Advocate masterminded a deep-rooted criminal conspiracy to defraud the government and knowingly committed offences specified under Section 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132(5) and punishable under clause (i) of subsection 1 of Section 132 of the Act ibid, the press statement read.

Vishal has been arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on February 27 who remanded him to judicial custody of 14 days till March 13, the Finance Ministry said adding that further investigation in the case is in process.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has made 27 arrests in various cases involving GST evasion amounting to more than Rs 4019.95 crore, the press statement added.

( With inputs from ANI )