CGST Delhi South Busts Rs. 15.78 Crore Fake ITC Racket, Arrests Firm Partner.
New Delhi:
The Anti-Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate, has uncovered a case involving the fraudulent availment, utilisation and passing on of inadmissible Input Tax Credit (ITC) worth more than Rs. 15.78 crore and arrested a partner of a firm engaged in the trading of iron and steel goods.
According to the investigation, the firm allegedly availed and utilised inadmissible ITC through bogus invoices amounting to approximately Rs. 87.67 crore.
Suppliers found non-existent or non-functional
The investigation found that the firm had availed ITC on the basis of invoices issued by multiple suppliers. Several of these firms were reportedly found to be non-existent, non-functional, suspended or cancelled.
Field verification conducted by the CGST authorities further established that some of the suppliers had no genuine business activity at their declared places of business, raising questions over the authenticity of the transactions.
ITC availed without actual receipt of goods
Further inquiry revealed that the inadmissible ITC was allegedly availed without actual receipt of the goods. The investigation also found that the credit was subsequently passed on to various recipients through invoices issued without any corresponding supply of goods.
The alleged transactions involved the use of invoices to create and transfer ITC without the underlying movement or supply of goods, according to the authorities.
Partner arrested and sent to judicial custody
Based on evidence gathered during the investigation and statements recorded under Section 70 of the CGST Act, 2017, the accused partner was arrested on September 14, 2026, under Section 69 of the CGST Act, 2017.
He was subsequently produced before the Patiala House Court in New Delhi, which remanded him to 14 days of judicial custody.
Further investigation underway
The CGST Delhi South Commissionerate has stated that the investigation into the case is continuing. Further action will be taken based on the findings of the ongoing probe.
The action is part of the department’s continuing enforcement drive against fraudulent Input Tax Credit claims and transactions involving bogus invoices, aimed at curbing tax evasion and protecting government revenue.