A Mumbai trader has been arrested by Central Goods and Services Tax (CGST) officials for using fake invoices and circular trading to avail input tax credit (ITC) and cause revenue losses of over ₹120 crore to the Government of India. The accused, Pritesh Shah was arrested on Tuesday and charged under relevant sections of the CGST Act.
Shah, a Mulund resident, had created a web of over 40 companies in Mumbai, Navi Mumbai, and Raigad, through which he committed the fraud. On visiting the registered premises, CGST officials found that most of the companies did not exist and were created only on paper. Shah was earlier arrested by the Central Bureau of Investigation (CBI) in a bank loan fraud case.
“Most of these companies were created on paper only. There has been no supply of goods to these companies but only invoices showing supply of goods worth ₹887 crore. He showed GST payments of around ₹120 crore which were used to avail ITC of the same amount,” said a senior official of the Raigad commissionerate of CGST Mumbai zone.