Introduction: In a significant move against tax evasion, CGST Navi Mumbai apprehended a proprietor/key person involved in illicitly availing and utilizing counterfeit Input Tax Credit (ITC) amounting to Rs. 5.01 Crores. The fraudulent scheme revolved around bogus invoices worth Rs. 30 Crores, leading to a substantial loss in tax revenue. This article delves into the arrest, the investigation, legal implications, and the broader context of such anti-evasion efforts.
Detailed Subheading Wise Analysis:
1. Press Release Overview The press release by the Office of the Commissioner of CGST Navi Mumbai details the arrest of a key individual associated with six firms allegedly engaged in fraudulent ITC practices. These firms include M/s Bluesky Trading Company, M/s Scorpion Enterprises, M/s C A Traders, M/s Amrut Traders Impex, M/s Sona Trading Company, and M/s Shree Satyam Trading Company.
2. Fake ITC Scheme The investigation revealed that these firms availed and utilized ITC of Rs. 5.01 Crores received from non-existent or counterfeit entities. The transactions were facilitated through fake invoices, artificially inflating their input tax credit. The total value of bogus invoices involved in this fraudulent scheme amounted to a staggering Rs. 30 Crores.
3. Legal Implications The arrest was made under Section 69(1) of the Central Goods and Services Act, 2017. The accused was charged with offenses under Section 132(1)(b) & (c) of the same Act. These sections pertain to wrongful availment or utilization of input tax credit through the issuance of invoices without actual supply of goods or services. The punishment for such offenses may include imprisonment up to five years along with fines. These offenses are classified as cognizable and non-bailable under Section 132(5).
4. Judicial Proceedings The arrested individual was presented before the Judicial Magistrate First Class, Vashi at Belapur, and subsequently, judicial custody was ordered for a period of 14 days. This step underscores the gravity of the offenses and the legal ramifications faced by the accused.
5. The Anti-Evasion Drive The case is emblematic of the Anti-Evasion drive initiated by CGST, Mumbai Zone. The drive is aimed at combating tax evasion and fraudulent practices that undermine both the tax collection system and honest taxpayers. By curbing fraudulent activities, the authorities aim to ensure a level playing field for compliant taxpayers and safeguard the government’s revenue.
Conclusion: The arrest in Navi Mumbai for illegal ITC availment and utilization serves as a stern reminder of the government’s commitment to curbing tax evasion. The CGST’s relentless efforts to identify and apprehend fraudulent individuals contribute to maintaining a fair tax ecosystem. Such actions not only deter potential wrongdoers but also safeguard the interests of legitimate taxpayers and the nation’s fiscal health.
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Government of India
Ministry of Finance – Department of Revenue
Office of the Commissioner of Cost TIC, CX, Navi Mumbai
16th Floor, Satra Plaza, Palm Beach Road, Sector-19D, Vashi,
Navi Mumbai-400705
V/CGST/NM/AE/Gr-VII/Fortune/228/2021-22
Navi Mumbai the Aug 25, 2023
PRESS RELEASE
On 25th August 2023, the Proprietor/Key person handling the business activities of six firms namely, M/s Bluesky Trading Company (GSTIN – 27AAHFIN6764PIZA), M/s Scorpion Enterprises, (GSTIN – 27AKUPD0205A2ZR), M/s C A Traders (OSTIN – 27A0KPD3230P1ZS), M/s Amrut Traders Impex (GSTIN – 27AADHA6564L1Z4), M/s Sona Trading Company (GSTIN – AOKPD2878R1Z4), M/s Shree Satyam Trading Company (GSTIN – 27AELPD5876Q1ZM), has been arrested by CGST, Navi Mumbai on the charges of availing/ utilizing/passing on fake Input Tax Credit (ITC) which was received from bogus/fake entities amounting to Rs 5.01 Crores.
2. A team of officers of Anti-Evasion, CGST & C.Ex. Navi Mumbai conducted enquiry against the aforesaid firms. The said firms have availed and utilized ITC of Rs.0 1 ‘ores which has been received from bogus/fake entities on the strength of bogus invoices received and passed on the same. The total amount of bogus invoices involved is approx. Rs. 30 crores, without actual supply of goods or services.
3. As per the provisions of Section 132(1) (b) & (c) of the CGST Act, 2017, if taxpayer issues invoices and/or bills without supply of goods or services or both leading to wrongful availment or utilization of input tax credit, or avails input tax credit using such invoice or bill, the Section 132(1)(i) renders the taxpayer punishable with imprisonment for a term which may extend to five years and with fine. Further, as per Section 132(5) offences specified supra are cognizable and non-bailable.
4. The above accused has been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1)(b) & (c) of the said Act and was produced before the Judicial Magistrate First class, Vashi at Belapur on 25.08.2023 and has been sent on judicial custody for 14 days.
5. This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the fraudsters and tax evaders, creating unhealthy competition for compliant taxpayers and defrauding the Government exchequer.
Sd/-
(PRABHAT KUMAR)
COMMISSIONER
CGST & C.Ex.: NAVI MUMBAI
