Fake invoicing racket worth Rs 7,896 cr busted; accused use 23 shell firms

The anti-evasion wing of Central Tax, Delhi West Commissionerate, cracked down on a racket of fake invoicing to the tune of Rs 7,896 crore, and involving fraudulent input tax credit (ITC) of Rs 1,709 crore. This was done by a network of 23 shell companies. Two people were arrested for the same on February 29.

These 23 shell companies were used to procure and generate invoices without supply of goods and passed on input tax credit. The arrested persons were involved in tax evasion by creating dummy firms to pass on ITC. Banking transactions were used to make ITCs genuine. Several mobile phones, computers and other incriminating documents were found in possession of the accused. 

The accused have committed offences under Section 132(1)(b) and Section 132(1)(c) of CGST Act, 2017 which are cognizable and non-bailable offences According to the provisions of Section 132 (5) and punishable under Clause (i) of Sub section (1) of Section 132 of the CGST Act, 2017. Accordingly, the accused were arrested on 29.02.2020 under Section 69(1) of the CGST Act, 2017 and remanded to fourteen days judicial custody by the Chief Metropolitan Magistrate, Patiala House Court.

Further investigation is underway.