CGST Delhi South Arrests Company Director in ₹60.59 Crore Fake ITC Fraud Case

The Central Goods and Services Tax Delhi South Commissionerate has arrested a director of a private limited company involved in smartphone trading for allegedly fraudulently availing Input Tax Credit (ITC) worth ₹60.59 crore through bogus invoices totaling ₹397.23 crore.

According to officials from the Anti-Evasion Branch, the case involves violations under the Central Goods and Services Tax Act, 2017, particularly provisions related to wrongful ITC claims. The fraudulent transactions were detected following an analysis of GST return data and verification of the supplier’s declared place of business.

Investigators found that the registered address of the supplier entity was merely a co-working space, where officials discovered no books of accounts, stock, invoices, or other evidence of genuine business activity. This raised serious doubts about the legitimacy of the transactions reported by the firm.

During the investigation, the director reportedly failed to provide a satisfactory explanation regarding the company’s operations and the mode of payment for the transactions. Authorities also could not establish any verifiable payment trail linked to the alleged supply of goods, indicating that the transactions were non-genuine paper entries created solely to fraudulently claim and utilise ITC.

Officials stated that the arrested director was a direct beneficiary of the fraudulent scheme. The offence falls under Section 132(1)(c) and is punishable under Section 132(1)(i) of the CGST Act.

Following the arrest, the accused was produced before the duty magistrate and has been remanded to judicial custody for 14 days.

The enforcement action is part of the CGST department’s broader crackdown on GST fraud. In the current financial year, the CGST Delhi South Commissionerate has already initiated prosecutions against 45 individuals involved in tax fraud cases under the CGST Act.