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HC issues notice to Maharashtra GST dept for arrest over circular trading

Petition says arrest made despite a CBIC circular saying that no tax liability is there in circular trading

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Circular trading refers to issuing of invoice by traders without supplying of underlying goods and services for availment of fraudulent ITC.

Indivjal Dhasmana New Delhi

2 min read Last Updated : Nov 07 2022 | 12:37 PM IST

The controversial issue of arrest for alleged fraudulent availing of input tax credit (ITC) through circular trading under the goods and services tax (GST) refuses to die.

The Bombay High Court has issued a notice to the Maharashtra GST Department for arresting a person for alleged availment of fraudulent ITC to the tune of Rs 8.69 crore through circular trading.

The person had filed a petition in the court alleging that he was arrested despite a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) saying that no tax liability is there in circular trading.

However, if

Topics : Goods and Services Tax GST input tax credit Maharashtra Bombay High Court input tax credit GST Government Central Board of Direct Taxes GST revenues tax departments