The Anti-Evasion Wing of the Central Goods and Services Tax (CGST) department arrested two individuals on Wednesday in connection with a fraudulent claim of input tax credit (ITC).
The operation was a combined effort of JC North and JC (AE) of the Gurgaon CGST Commissionerate, headed by Principal Commissioner Sanjeev Gautam.
The accused had allegedly engaged in paper trading to defraud the department by claiming false ITC.
According to a CGST official, the arrested individuals orchestrated a network of firms, each registered under different proprietors and directors. These firms were used to generate goods-less invoices amounting to a taxable value of Rs 20.3 crore, leading to an illicit ITC claim of Rs 7.1 crore.
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The fraud was uncovered following an earlier tax credit scam of Rs 66.6 crore, exposed on February 20. The subsequent investigation by the CGST Commissionerate of Gurgaon traced the accused’s involvement in the latest case. During interrogation, the suspects admitted their role in the fraudulent scheme and were arrested under Section 69(1) of the CGST Act, 2017. A local court has remanded them to judicial custody for 14 days.
“These accused individuals are also linked to circular trading and fraudulent refund claims through several other firms. Further investigation is underway,” a CGST official confirmed.
The CGST department has been actively cracking down on tax fraud and illegal ITC claims, emphasizing stringent action against those manipulating the tax system. Authorities have reiterated their commitment to curbing tax evasion and ensuring compliance with GST regulations.
Key Takeaways:
- CGST Fraud Alert: Two arrested in a Rs 7.1 crore ITC scam.
- GST Tax Scam: Accused linked to a larger Rs 66.6 crore tax fraud.
- Legal Action: Arrests made under Section 69(1) of the CGST Act.
- Ongoing Investigation: Authorities suspect involvement in more fraudulent claims.
