Directorate General of Good and Services Tax Intelligence (DGGSTI), Meerut Zonal Unit, on Friday busted a billing racket involved in creating numerous fictitious firms for fraudulent passing of Input Tax Credit (ITC) on invoices without the supply of actual goods.
Two persons have been arrested in the case and remanded to judicial custody for 14 days.
Speaking to ANI, officials said two masterminds, who are residents of South-East Delhi, were operating and managing 23 firms which had been registered under name of various dummy proprietors.
According to an official statement, the accused used to procure supplies of metal scrap from local unregistered dealers without payment of GST and the invoices for the purchase of scrap was generated in the name of these fictitious firms in order to pass on fraudulent ITC to various established buyers and "in return, they received 0.5-1 per cent of invoice value as commission".
It said data retrieved from mobile phones and laptops recovered during search lead to the recovery of several incriminating documents related to these fictitious firms such as a copy of invoices, e-way bills and handwritten entries of cash in notebooks.
Statements of the office staff of the accused also corroborated these findings.
Officials said prima facie it is evident that using these 23 firms, both the masterminds have passed on illegal and unlawful ITC to the tune of approx Rs 130 crore without any concomitant supply of goods. Quantum of the fraud and the number of firms involved in this racket are likely to go up in further investigations.
The accused were arrested on Thursday under section 69 of the CGST Act, 2017. They were sent to 14-day judicial custody.
( With inputs from ANI )
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