The Anti-Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate has arrested two key individuals— a proprietor and his father— for allegedly orchestrating a large-scale Goods and Services Tax (GST) fraud involving fraudulent availment of Input Tax Credit (ITC) amounting to approximately ₹8.52 crore through bogus invoices valued at ₹199.90 crore, without any actual receipt or supply of goods.
According to officials, the arrests follow extensive searches conducted on January 12 and 13, 2026, at the principal place of business of the firm, its additional business locations, and the residential premises of the accused. During the search operations, GST officers reportedly found that several of the declared business premises were closed, non-operational, or non-existent, with no evidence of genuine commercial activity. Physical verification revealed negligible infrastructure, absence of stock, and lack of manpower, reinforcing suspicions of a paper-only operation designed to facilitate fake invoicing.
Fake Firms and Paper Transactions
Preliminary findings of the investigation suggest that the firm had issued and received invoices without any actual movement of goods, solely for the purpose of generating ineligible ITC. The fraudulent credit was then utilized to offset GST liabilities or passed on to other entities, causing significant revenue loss to the exchequer.
Statements recorded under Section 70 of the CGST Act, 2017, which empowers tax authorities to summon individuals during an inquiry, played a crucial role in the case. During questioning, it emerged that although the business was registered in the name of the proprietor, the day-to-day operations were effectively controlled by his father, who allegedly managed the creation and use of bogus invoices. Officials stated that both individuals admitted to the wrongful availment of ITC and were found to be the direct beneficiaries of the fraudulent transactions.
Arrests and Legal Action
Based on the evidence gathered, the Anti-Evasion Branch arrested both the proprietor and his father for offences punishable under Section 132 of the CGST Act, 2017, which deals with serious GST offences including issuance of fake invoices and wrongful availment of ITC. Such offences are cognizable and non-bailable when the amount involved exceeds statutory thresholds.
The arrested persons were produced before the Duty Magistrate, who remanded them to judicial custody for 14 days, officials confirmed.
Ongoing Probe to Trace Fund Trail
The CGST department has stated that the investigation is ongoing and expanding. Officers are currently tracing the flow of funds, examining bank accounts, and scrutinising linked entities to identify any additional beneficiaries, facilitators, or shell firms involved in the alleged racket. Authorities have not ruled out further arrests as the probe progresses.
