Delhi GST unit unearths racket involving fake invoices; two arrested

Topics GST invoices | fraud

The revenue department on Friday said it has unearthed a racket involving issuances of fake invoices for availing tax benefits worth Rs 22 crore under GST and arrested two persons in this regard.

Central GST Delhi North Commissionerate has unearthed the racket of issuance of fake invoices without actual supply of goods and services, the revenue department said in a statement.

Two individuals, named Naveen Mutreja and Keshav Ram, have been arrested in this connection and remanded to 14 days judicial custody by a local court.

The accused were found to be operating 42 fake firms created to facilitate fraudulent Input Tax Credit (ITC), thus defrauding the exchequer.

"Prima facie fraudulent ITC of about Rs 22 crore has been passed on using invoices involving an amount of Rs 150 crore," the release said.

The modus operandi of the two accused, inter alia, involved obtaining GST registration of fake firms across Delhi NCR, Haryana, Rajasthan and Uttar Pradesh using documents of unsuspecting individuals and generating good-less invoices and e-way bills of these firms from a premise in Karol Bagh, Delhi.

On preliminary scrutiny, it appears that there is no nexus between inward and outward supplies of the errant firms.

Further, the firms involved have passed on fraudulent ITC to a range of buyers who have availed the same to discharge their GST liability on outward supplies, thus defrauding the exchequer, the release said.

Investigations are underway to identify the key beneficiaries of this racket and to recover GST involved, it added.

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