The Central Goods and Services Tax (CGST) Delhi South Commissionerate has unearthed a significant Input Tax Credit (ITC) scam amounting to ₹47.12 crore in the iron and steel sector. The action, spearheaded by the Anti-Evasion Branch, has led to the arrest of a proprietor based in Naraina, accused of orchestrating the fraudulent operation.
According to official sources, the accused firm was engaged in trading iron and steel products and allegedly availed and passed on ITC worth ₹47.12 crore against fictitious invoices corresponding to a taxable turnover of around ₹261 crore. Investigations revealed that no actual movement of goods had taken place, and the transactions existed only on paper.
The probe was triggered by specific intelligence inputs that pointed to irregularities in the firm’s supply chain. Upon closer scrutiny, it was found that the entity had claimed ITC from suppliers whose GST registrations had either been cancelled or suspended — a clear breach of provisions under the CGST Act, 2017.
Authorities carried out a search at the firm’s declared business premises under Section 67(2) of the CGST Act and discovered that the location was non-functional. The proprietor was subsequently taken into custody on August 1, 2025, under Section 69 in conjunction with Sections 132(1)(b) and 132(1)(c) of the Act, which pertain to the fraudulent availing of input tax credit and issuance of bogus invoices.
This operation is part of a broader enforcement campaign launched by the CGST Delhi South Commissionerate aimed at dismantling fake ITC networks that not only result in massive revenue loss but also distort competitive fairness in the market. Officials emphasized that advanced data analytics and supply chain tracking tools are being extensively used to uncover such fraudulent networks.
The department reiterated its commitment to intensifying its crackdown on tax evasion in the coming months, urging businesses to maintain compliance and avoid associating with suspicious or unverified entities in the GST ecosystem.
