Fake Invoicing Racket Involving Rs 38.5 Crore Tax Evasion Unearthed

The finance ministry said Goods and Services Tax (GST) officers had unearthed a racket of 54 bogus firms involved in fake invoicing of Rs 611 crore involving tax evasion of Rs 38.5 crore.

Delhi South CGST Commissionerate conducted searches and inspections spread across Delhi, unearthing a cartel running 54 bogus firms registered in the Delhi-NCR region engaged in fake invoicing and circular trading.

Incriminating documents such as rubber stamps and letterheads of various firms, mobile phones, laptops etc., have been seized from the search premises.

"Preliminary enquiry conducted so far into these transactions has revealed fake invoicing of around Rs. 611 crores and tax evasion of over Rs. 38.5 crores. In 
their confessional statements, the members of the cartel have accepted their roles in managing these bogus firms," the ministry said in a statement.

Three key persons of the cartel, namely Ankit Gupta, the mastermind managing these bogus firms and two of his accomplices, Rabiendra Singh and Rajendra Singh, were arrested on February 23 and remanded 14 days' judicial custody.

In a separate statement, the ministry said the Central Goods and Services Tax (CGST) Commissionerate, Faridabad, of Panchkula CGST Zone, on February 23 arrested two persons for running a fake billing racket, involving five dummy firms, for issuance of fake invoices of over Rs 200 crore without actual supply of goods and availing and passing fraudulent Input Tax Credit (ITC) amounting to Rs 31.85 crore.

As per GST law, issuing an invoice or bill without supply of goods or services and wrongful availment or utilisation of Input Tax Credit is a cognisable and non-bailable offence if the amount is over Rs 5 crore.

"Both the proprietors of the said firms have accepted that they have availed and passed on fraudulent ITC of Rs. 31.85 crore, without actual supply of goods to inter-state recipients, has accepted the total GST liability of Rs. 31.85 crore during the initial investigation. The quantum may increase in future," the statement added.