CGST Delhi busts Rs 31.95 crore fake ITC scam; company director arrested
Central GST officials in Delhi have busted a Rs 31.95 crore fake Input Tax Credit fraud involving a company that claimed credit using fake invoices. The firm’s director was arrested, and investigations revealed links to multiple fictitious firms
New Delhi: Central GST officials have busted a Rs 31.95 crore scam in the national capital involving a company that was fraudulently availing Input Tax Credit (ITC) based on fake invoices. The director of the company has been arrested, according to an official statement issued on Friday.
The anti-evasion branch of CGST Delhi South Commissionerate unearthed a large-scale case of fraudulently availing ITC.
Director of the company has been arrested for orchestrating the evasion of Goods and Services Tax (GST) of approximately Rs. 31.95 crore and produced before the competent judicial authority, which has remanded him to judicial custody of 14 days, the statement said.
The investigation revealed that the company is actively engaged in availing fraudulent Input Tax Credit solely on the basis of invoices without any underlying supply of goods or services.
Acting on specific intelligence developed by the anti-evasion wing, an investigation was initiated into a suspicious supply chain. The inquiry revealed that the firm had fraudulently availed ITC without any actual movement of goods.
Further investigation established that the firm had availed and passed on ineligible ITC from fictitious and non-existent firms, in gross violation of the provisions of the CGST Act 2017, the statement said.
This case forms part of the broader initiative undertaken by the CGST Delhi South Commissionerate to unearthed fraud ITC case that lead to significant revenue leakage and undermine fair market practices. The department is leveraging data analytics and supply chain mapping tools to proactively identify and disrupt such fraudulent activities, the statement added.
Meanwhile, the number of ITC fraud cases detected by Central GST formations in the last three years has more than doubled from 7,231 in 2022-23 involving an amount of Rs 24,140 crore to 15,283 cases in 2024-25 involving a sum of Rs 58,772 crore, according to information tabled in Parliament recently.
The government has taken proactive steps to prevent and tackle the fraudulent cases of claiming ITC which include allowing input tax credit only for invoices or debit notes which have been furnished by the supplier in FORM GSTR-1 and details of which have been communicated to the registered person in FORM GSTR-2B.
As part of these steps, a registered person is not allowed to furnish FORM GSTR-1, if he has not furnished return in FORM GSTR-3B for the preceding tax period, according to the government.
