The Anti-Evasion Branch of the Central Goods and Services Tax (CGST), Delhi South Commissionerate, has arrested a director of a private limited company involved in trading smartphones for allegedly availing fake ITC worth Rs. 60.59 crore using bogus invoices amounting to Rs. 397.23 crore.

According to officials, the fraudulent availment of ITC constitutes a violation of Section 16 of the CGST Act, 2017 and attracts penal provisions under Section 132 of the Act.

The investigation began after a detailed analysis of GST return data raised suspicion regarding the transactions reported by the company. Subsequent verification of the supplier entity’s declared place of business revealed that the premises was merely a co-working space. Authorities found no books of accounts, stock, invoices, or any other records indicating genuine business activity at the location.

During questioning, the director failed to provide a satisfactory explanation regarding the functioning of the firm or the payment mechanism for the purported transactions. Investigators also could not establish any verifiable payment trail corresponding to the alleged supply of goods. Officials believe that the transactions were non-genuine and were carried out only on paper to facilitate fraudulent passing and utilization of ITC.

Authorities stated that the arrested director was the direct beneficiary of the alleged tax evasion. The offence falls under Section 132(1)(c) and is punishable under Section 132(1)(i) of the CGST Act, 2017.

Following the arrest, the accused was produced before the Duty Magistrate, who remanded him to judicial custody for 14 days.

Officials also highlighted that the CGST Delhi South Commissionerate has intensified enforcement actions during the current financial year and has already launched prosecutions against 45 individuals involved in tax fraud under the CGST Act, 2017.

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