Officials of the Goods and Services Tax and Central Excise Commissionerate, Puducherry, have arrested a person after discovering that he had availed himself of fake input tax credit to the tune of ₹227 crore. He had passed on a substantial amount of the fake input tax credit to his own units in Tamil Nadu.
A press release from the Commissioner of GST and Central Excise, Milind R. Lanjewar, said a team of officials from the Enforcement and Compliance Management Section of the Commissionerate conducted searches at the residence and business premises of a person on Thursday based on information that he was involved in availing of and passing on fake input tax credit (ITC).
The officials found that the person, a dealer of a construction company, had fraudulently obtained two GST registrations with the same PAN and same principal place of business in Karaikal, Puducherry for the purpose of availing and passing on fake ITC.
The taxpayer had similarly obtained four GST registrations in the GST of Kumbakonam, Tamil Nadu as well to avail and pass on the fake ITC.
The person was found to have fraudulently availed a substantial amount of ITC without any supporting documents or corresponding supply of goods and was engaged in circular bill trading, i.e., issuing GST invoices without actually supplying goods or services, in violation of the provisions of the Central Goods and Services Tax Act, 2017.
While the ITC availed by him stood at ₹227 crore, a substantial amount of the credit was passed on to his own units (four GST registrations) at the same address in Kumbakonam.
During the search operation, the person reversed ITC to the tune of ₹191.33 crore and admitted to have availed and passed on the ITC without underlying supply of goods. He was arrested by the team under Section 69, of CGST Act, 2017.
He was examined at Karaikal General Hospital and produced before a local court in Karaikal and remanded to 15 days judicial custody.
Published – January 31, 2025 09:04 pm IST