Based upon specific intelligence inputs, the officials of the anti-evasion branch of the Central Goods and Service Tax (CGST), Commissionerate, Delhi (East), have busted a major racket for generation of huge inadmissible input tax credit (ITC) through fake billing of about Rs 1,278 crore.
The well-established syndicate was being operated by floating seven different fake firms with the intent of passing of inadmissible credit to the tune of Rs 137 crore (approx), the Finance Ministry said in a statement.
Searches were conducted in more than nine places spread over different locations in Delhi and Haryana to identify the taxpayers, who were defrauding the government of its legitimate taxes.
The modus operandi of the fraudulent taxpayers included bogus invoices/bills creation without actual movement of goods, the statement added.
All the e-way bills generated to transport the goods were fake.
The mastermind of the entire racket, Ashish Aggarwal, was arrested on Thursday under Section 132 of the CGST Act and has been remanded to transit judicial custody by the duty Metropolitan Magistrate till the hearing of regular judicial remand application by the CJM, Patiala House Court.
The accused kingpin of this fake billing racket was been absconding for more than 60 days and after intense coordinated efforts of the officers of the anti-evasion branch, his presence was secured to record his statement, wherein he admitted to his guilt and was arrested subsequently, the statement said.
The primary beneficiary firm of this bogus billing network was M/s Maya Impex, which has been registered in the name of Ashish Aggarwal's 66-year old mother through which fake ITC of Rs 77 crore has been passed on.
The fake billing operation was primarily engaged in generating and passing of fake ITC primarily to the milk products industry. Bogus invoices were raised against fictitious sale of milk products such as ghee, milk powder etc.
It is pertinent to mention here that apart from the other number of distinct companies, major brands like M/s Milk Food Ltd was one of the major beneficiaries of this inadmissible credit. During the course of search operations, huge quantum of incriminating documents pertaining to this racket were recovered.
So far the inadmissible ITC of more than Rs 7 crore has been recovered and further investigations are underway to expose the other fictitious billing entities associated with this syndicate.