The Anti-Evasion Wing of the CGST Palghar Commissionerate has exposed a massive Rs29.58 crore fake Input Tax Credit (ITC) scam, leading to the arrest of three individuals on September 12. This major bust follows months of investigation and intelligence gathering, particularly during the second All India Drive against fake GST registrations.
The primary firm implicated in the scam is H&D Company, located in Palghar, which was linked to several bogus firms. Notably, Hinglaj Packaging LLP was also found to be involved in issuing fraudulent invoices to claim and pass on ITC, despite no actual supply of goods or services being made. By doing so, the involved firms unlawfully reduced their tax liability on output by falsely claiming tax had already been paid during the input stage, in clear violation of GST laws.
Chirag Ashok Raval, the mastermind behind the scam, along with his associates Swaraj Prafullchandra Dave and Parth Jitender Raval, allegedly set up a network of fake firms under the names of family members and relatives. These companies generated fraudulent invoices, which facilitated the illegal claiming and passing of ITC amounting to Rs29.58 crore.
On September 12, all three individuals were arrested under Section 69 of the CGST Act, 2017, for offences punishable under Section 132(1)(b) and (c) of the Act. They have been remanded to judicial custody until September 25, 2024.
The CGST Commissionerate emphasized that this operation is part of a broader, ongoing initiative to crack down on fraudulent ITC claims and curb tax evasion. Investigations are still underway to identify and uncover further entities involved in the scam.