The Central Goods and Services Tax (CGST) & Central Excise Raigad Commissionerate of the Mumbai Zone has arrested two individuals for their alleged involvement in a fraudulent Input Tax Credit (ITC) scam amounting to over ₹9 crore. The arrests were made on July 31, 2025, following a detailed investigation by the Anti-Evasion wing of the department.
The Modus Operandi: Fake Firms, Fake Invoices
Acting on precise intelligence inputs, the Anti-Evasion team uncovered a network of fictitious firms created to avail and pass on fraudulent ITC without any actual supply of goods or services. Central to this racket was M/s. Jaisha Metals Private Limited, which was found to have availed ineligible credit using invoices issued by several non-existent entities.
During field verification, the firm was found to be non-operational at its registered principal place of business in New Panvel. There was no evidence of receipt or supply of goods, further confirming the fictitious nature of the transactions.
Accused Identified and Arrested
The investigation led to the identification of two key individuals behind the scam namely Mukesh Devnarayan Tiwari, a resident of New Panvel and Sandeep Nanhelal Modanwal, a resident of Dombivli (West).
Both individuals are Directors of M/s. Jaisha Metals Private Limited and were found to be actively involved in orchestrating the creation of shell firms and facilitating the fraudulent ITC claims. The total fraudulent credit availed and passed on is pegged at over ₹9 crore.
Legal Action Initiated
The accused were arrested under Section 69(1) of the CGST Act, 2017, for offences punishable under Section 132(1)(b)and Section 132(1)(c), which pertain to issuing invoices without supply of goods or services and fraudulently availing input tax credit.
Following their arrest, the two were produced before the Judicial Magistrate First Class, Panvel, who remanded them to judicial custody.
Ongoing Investigation and Wider Implications
The department has launched a broader investigation to trace other potential beneficiaries, intermediaries, and firms involved in the fake invoice network. Authorities are also scrutinizing digital and financial records to map the flow of fraudulent credits and uncover any larger conspiracy.
A senior officer from the Raigad Commissionerate stated:
“This operation is part of our continued commitment to clamp down on tax evasion and safeguard government revenue. Such fraudulent ITC practices not only erode the tax base but also create an uneven playing field for honest businesses.”
The arrest comes amidst increasing scrutiny by GST authorities on shell companies and bogus invoicing practices, especially in the Mumbai Zone, which has emerged as a hotspot for such activities in recent years.
Further developments and potential arrests are anticipated as the investigation progresses.
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