CGST Delhi South Commissionerate Arrests Company Director in ₹8
Crore ITC Fraud Case
·
Fraud Detected: Company director arrested for fraudulent availment/utilisation
of Input Tax Credit (ITC) worth over ₹8 crore.
·
Violation: Breach of Section 16 of the CGST Act, 2017; ITC claimed without actual supply
of goods/services.
o Suppliers involved were suspended or cancelled.
o Backward supply chain analysis (L1, L2,
L3) confirmed no inward supplies.
o Ineligible ITC was passed on to buyers
without underlying supply.
·
Admission: Director admitted to controlling transactions but failed to provide documentary
evidence.
o Offences under Section 132(1)(b) &
132(1)(c), punishable under Section 132(1)(i).
o Arrested under Section 69(1) of CGST Act.
o Remanded to judicial custody till 30
April 2026 by Patiala House Court.
·
Next Steps: Further investigation is ongoing.
[ABS News Service/18.04.2026]
Continuing its enforcement
drive against Input Tax Credit (ITC) frauds, the Anti-Evasion Branch of the Central
Goods & Services Tax (CGST), Delhi South Commissionerate, has arrested a director
of a company dealing in assorted items for fraudulent availment/utilisation
of Input Tax Credit (ITC) of more than Rs. 8 crore in violation
of Section 16 of the CGST Act, 2017.
Intelligence was developed through data-analytics
that the taxpayer was involved in fraudulent availment/utilisation
of ineligible ITC without underlying supply from the suppliers which were either
suspended, cancelled suo-moto, or cancelled on application.
Backward supply chain analysis established absence of inward supplies at L1, L2,
L3 levels, thereby breaking the credit chain and rendering the ITC inadmissible
under Section 16 of the CGST Act, 2017. Further, it was also found that the taxpayer
has passed-on ineligible ITC to its buyers/recipients without underlying supply.
Statement of director of the company was
recorded under Section 70 of the CGST Act, 2017 on 16.04.2026 with admission of
carrying out and controlling all transactions on behalf of the company. However,
he failed to produce documentary evidence to substantiate the veracity of the transactions.
As the director of the company has committed
cognizable and non-bailable offences as prescribed under Section 132(1)(b) &
Section 132(1)(c) punishable under Section 132(1)(i) of
the CGST Act, 2017, he was arrested under Section 69(1) of the CGST Act, 2017 and
produced before the Patiala House Court, which remanded him to judicial custody
till 30.04.2026.
Further investigation in the case is under
progress.