Introduction: The Ministry of Finance recently made headlines with the arrest of the Finance Head of a prominent firm for alleged GST evasion amounting to a staggering Rs 88 crore. This incident, which unfolded in Mumbai, has raised significant concerns about tax compliance and the enforcement of GST regulations.

Detailed Analysis: The arrest, carried out by the CGST Mumbai Zone and CGST Navi Mumbai Commissionerate, stems from the firm's purported supply of taxable services totaling approximately Rs. 492 crore without issuing any tax invoices. This blatant violation of GST regulations, as outlined in Section 132 of the Central Goods and Services Tax Act 2017, constitutes a serious offense.

Furthermore, investigations revealed a sophisticated modus operandi employed by the accused, involving the illegal transfer and deposit of cash into undisclosed bank accounts. By manipulating transactions and concealing income through fictitious B2C restaurant sales, the firm attempted to evade tax scrutiny and accountability.

Notably, this arrest marks the second instance in connection with the ongoing case, following an earlier admission of guilt by the company's Finance Controller in December 2023. The subsequent arrest of the Finance Head underscores the authorities' resolve to combat tax evasion and uphold the integrity of the GST framework.

The geographical scope of the arrest, with the accused apprehended in Ahmedabad, Gujarat, highlights the cross-border ramifications of financial crimes. Legal proceedings have since commenced, with the accused remanded to judicial custody pending further investigation.

Conclusion: The Ministry of Finance's swift action in apprehending the Finance Head underscores the government's commitment to combating tax evasion and ensuring compliance with GST regulations. This case serves as a stark reminder of the consequences of fraudulent financial practices and the importance of robust enforcement measures. As investigations progress, stakeholders will keenly observe developments, underscoring the need for heightened vigilance and accountability in financial transactions.

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Ministry of Finance

Finance Head of a firm arrested for GST evasion to the tune of Rs 88 crore

Mumbai, 4 March 2024

CGST Mumbai Zone, CGST Navi Mumbai Commissionerate arrested on 01.03.2024, the Head – Finance of a firm for supplying taxable service amounting to Rs. 492 Cr approximately without issuing any tax invoice and thereby indulging in the GST Evasion to the tune of approximately Rs 88 Crores.

M/s Foodlink F&B Holdings India Pvt Ltd, Mumbai is found to have supplied taxable service amounting to Rs. 492 Cr approximately without issuing tax invoice and thereby committing offence as specified in clause (a) of sub-section (1) of Section 132 of the Central Goods and Services Tax Act, 2017.

As per Section 132 of the CGST Act 2017, supply of goods and services without issuing tax invoices is a cognizable and non-bailable offence if the tax amount involved is above Rs. 5 Cr.

The First arrest in the case was made in December 2023, when the Finance Controller of the said company admitted his role in illegal transfer/deposit of cash, generated from the stated modus operandi in various bank accounts not declared in GST Registration, by breaking it into smaller amounts to avoid tax scrutiny and depositing in the name of fake B2C restaurant sale. This is the second arrest in this case.

The above accused was arrested from Ahmedabad, Gujarat and produced before the nearest Magistrate who granted transit remand. The arrested accused was produced before the jurisdictional Magistrate who has remanded the arrested accused to Judicial Custody till 12.03.2024.

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