Man arrested for ₹110-crore GST fraud near Mumbai, search for aide on

Officials of the Goods and Services Tax (GST) commissionerate in Raigad, on Friday, arrested a 40-year-old man allegedly involved in issuing fake invoices of more than ₹650 crore and availing input tax credit (ITC) of ₹110 crore, without the actual supply of goods. According to officials, this is one of the biggest GST frauds detected in recent times.

They are on the lookout for another accused.

ITC allows traders to claim credit for the taxes, which they have already paid on the purchase of goods, from the government. According to the Central Goods and Services Tax (CGST) Act, issuing an invoice or bill to avail ITC without supplying goods is illegal and can lead to arrest. The case came to light after a month-long investigation by the GST and the Central excise commissionerate in Raigad, under the chief commissioner of Mumbai zone.

According to a senior official of the GST Council in Raigad, Rakesh Hanuman Prasad Garg, 38, in association with his brother-in-law Anand Mangal, 40, issued invoices worth ₹650 crore with a liability of ₹110 crore, by floating a number of entities dealing in iron, steel and cement. These firms have been identified as M/s Moksha Alloys Private Ltd, M/s Latisha Sales Agencies Private Ltd, M/s Cumong Ispat Private Ltd, M/s Aahan Ispat Private Ltd and M/s Tilibandha Sales Agencies.

While Mangal was arrested and produced before a court on Friday, officials are on the look-out for Garg, the son of an established businessman who deals in iron and steel.

The official said that till now, they have not found the involvement of the businessman’s firm in the fraud. “The accused engineered a serious economic offence by showing dummy procurement of goods from the firms, most of which are located outside Mumbai,” said the official.