A network of fake firms – used by their operator to generate and pass on fake Input Tax Credit (ITC) of Goods and Services Tax (GST) – has been unearthed in Delhi.
The network was being operated by Vishal, a lawyer who was practising in Delhi’s Karkardooma Court. The officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi-East unearthed the fraud, an official statement said.
Vishal started the GST fraud by setting up fake firms “in his own name that he got registered at his home”, officials said.
Gradually, 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 at his home.
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, as per officials.
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 “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 official statement read.
Vishal has been arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on Saturday 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.
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 statement added.