DGGSTI arrests 1 person for fraudulently availing ITC benefits of over Rs 16 cr

The Directorate General of GST Intelligence has arrested one person for fraudulently availing input tax credit (ITC) of more than Rs 16 crore on the basis of fake invoices.

"The Directorate General of GST Intelligence Hqrs has arrested one person, namely, Munish Kumar, Partner of M/s Sushil Kumar Munish Kumar, Hisar, Haryana and controller of M/s Sushil Kumar Munish Kumar & Co., Ahmedabad," a finance ministry statement said.

Both the firms had fraudulently taken ITC to the tune of more than Rs 16 crore involving invoice value of Rs 322 crore on the strength of invoices issued by non-existent fake firms, it said.

"The said two firms thereafter, passed on such fraudulently taken ITC to some of the well established cotton yarn spinners who availed of the same to discharge their GST liability against the outward supply with an ulterior motive to defraud the Government exchequer," the statement added.

During the investigations conducted so far into the fake billing racket in the cotton industry, the DGGI Hqrs has recovered an amount of Rs 28 crore towards evaded GST. Further investigations in the matter are in progress, it added.

The statement further said that Kumar, during investigations, admitted that both the firms had taken ITC fraudulently on invoices issued by non-existent fake firms and then passed on such ITC to various spinners.

It said the offences committed by Kumar are cognizable and non-bailable, and punishable under Section 132(1)(i) of the CGST Act, 2017.

Consequently, Kumar was arrested on June 21, 2019, under Section 69(1) of the CGST Act, 2017.