Delhi South CGST unearths fake invoicing racket involving tax evasion of 17 crore, 2 held

A specific intelligence was developed by the officers of Central Goods and Service Tax (CGST) Delhi South Commissionerate concerning certain bogus firms that were created solely for the purpose of generating goods-less invoices and passing on ineligible input tax credits along the chain.

“Inspections were conducted at the registered premises of 03 bogus firms/company namely NexGen Busicorp, Informatics and GW Infotech Pvt. Ltd. registered in the jurisdiction of CGST Delhi South Commissionerate that were engaged in fake invoicing and circular trading,» the Ministry of Finance said in a statement.

“Incriminating documents were resumed from the premises of the taxpayers,» it added.

The preliminary enquiry conducted so far into the transactions of these firms has revealed tax evasion of ₹17 crore approx. The proprietor/director in his confessional statements allegedly has admitted his role in passing and availing fraudulent ITC without any underlying supply of goods.

“The persons behind these bogus firms have defrauded the government exchequer and committed offences specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and non-bailable. Two persons namely Sanjay Kumar Srivastava and Sunil Gulati have been arrested on 17 March 2023,» the ministry said.

The accused were produced before the duty metropolitan magistrate following which they have been remanded to judicial custody for 14 days. Further investigation is in progress.