In a significant crackdown on fraudulent Input Tax Credit (ITC) claims, the Central Goods and Services Tax (CGST) Palghar Commissionerate has uncovered a fake ITC racket worth Rs59.11 crore. The operation led to the arrest of three individuals, including Chirag Ashok Raval, Swaraj Prafullchandra Dave, and Parth Jitender Raval, who were allegedly behind the operation.
The trio is accused of registering eight non-genuine firms, with M/s H&D Company in Palghar, Maharashtra, being the key entity. These companies, set up under the names of their family members, were involved in issuing fake invoices for goods or services that were never actually supplied, allowing them to fraudulently claim ITC. This scheme violated the Goods and Services Tax (GST) law, which is designed to ensure that tax credits are only granted for genuine business transactions.
The investigation, which was triggered by intelligence gathered during the second All India Drive against fake GST registrations, revealed that Rs29.53 crore of ITC was fraudulently claimed, and Rs29.58 crore was passed on through these fraudulent invoices. The involvement of fake firms and invoices allowed the accused to evade taxes while benefiting from illegal tax credits.
The arrested individuals have been charged under Section 69 of the CGST Act, 2017, for offences under Section 132. They are currently in judicial custody until September 25, 2024. The authorities have emphasized that investigations are ongoing to uncover additional fraudulent networks and entities involved in similar scams.
This major bust highlights the government’s ongoing efforts to combat GST evasion and protect its revenue. The special all-India anti-fake registration drive remains an essential part of the strategy to dismantle fraudulent operations and prevent further misuse of the ITC system.