On August 25, 2023, CGST Navi Mumbai undertook a significant operation leading to the arrest of the proprietor and key personnel from six firms. They are charged with availing, utilizing, and passing on fabricated Input Tax Credit (ITC), all orchestrated through counterfeit invoices.
On August 25, 2023, CGST Navi Mumbai undertook a significant operation leading to the arrest of the proprietor and key personnel from six firms. They are charged with availing, utilizing, and passing on fabricated Input Tax Credit (ITC), all orchestrated through counterfeit invoices.
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The Scale of the Fraud:
The magnitude of the scam is substantial, with bogus invoices amounting to approximately Rs. 30 crores, void of any actual goods or service supply. The ill-gained ITC totals up to Rs. 5.01 crores, a staggering figure that has severely impacted compliant taxpayers and the national exchequer.
The Companies Involved:
The firms under the scanner for their dubious activities include:
- M/s Bluesky Trading Company (GSTIN – 27AAHHN6764P1ZA)
- M/s Scorpion Enterprises, (GSTIN – 27AKUPD0205A2ZR)
- M/s C A Traders (GSTIN – 27AOKPD3230P1ZS)
- M/s Amrut Traders Impex (GSTIN – 27AADHA6564L1Z4)
- M/s Sona Trading Company (GSTIN – AOKPD2878R1Z4)
- M/s Shree Satyam Trading Company (GSTIN – 27AELPD5876Q1ZM)
Investigative Actions:
The Anti-Evasion team of CGST & Central Excise, Navi Mumbai, spearheaded the inquiry against the aforementioned firms, uncovering their malicious practices of leveraging bogus invoices to avail and utilize the ITC.
Legal Repercussions:
Under the CGST Act, 2017, Sections 132(1) (b) & (c) strictly penalize taxpayers that issue invoices without any genuine goods or services supply leading to unlawful ITC availment. The consequences of such offenses can result in imprisonment for up to five years, accompanied by fines. Section 132(5) declares these offenses as both cognizable and non-bailable. The accused individuals, in this case, have been arrested as per Section 69 (1) of the Central Goods and Services Act, 2017 for the infractions under Section 132 (1)(b) & (c) of the same Act. They faced the Judicial Magistrate First class at Belapur on 25.08.2023 and are now undergoing a 14-day judicial custody.
Conclusion: The action against these firms showcases CGST, Mumbai Zone's determination in its Anti-Evasion drive, targeting fraudsters and tax evaders who not only harm compliant taxpayers but also undermine the Government's revenue. As conveyed by Shri Prabhat Kumar, Commissioner of CGST and Central Excise, Navi Mumbai Commissionerate, the stern action signals the government's commitment to fostering a fair competitive environment and safeguarding the nation's economic health.