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CGST and Central Excise officials arrested the proprietor of firm involved input tax credit fraud to the tune of 6.46 crore. The investigation is underway and the defrauded amount is likely to go up as it progresses, Finance Ministry said in a statement on Sunday.

“An arrest was made by the officers of CGST and Central Excise, Mumbai Central Commissionerate in an ongoing investigation involving receipt and supply of ineligible Input Tax Credit amounting to 6.46 crore. The availment was made by M/s S.R. Enterprises against fake invoices issued by various non-existing/fake/fictitious firms without actual receipt of goods," the ministry said.

Investigation showed that this firm availed the ineligible input tax credit (ITC) against fake invoices, where no supplies from any suppliers have been physically received, and passed on the same to other buyers.

“In this connection, search and inspection was conducted by the anti-evasion team of CGST and Central Excise, Mumbai Central Commissionerate at the office and godown of proprietor and after detailed questioning, one person who is proprietor of the firm was arrested on September 24, 2021 under section 69 of CGST Act, 2017, and relevant provisions of CrPC for availing ineligible ITC amount of 6.46 crore and was produced before the Additional Chief Metropolitan Magistrate, Fort, Mumbai," the statement further read.

The accused has been sent to 14 day judicial custody while authorities are continuing further investigation to identify other scamsters involved in the tax fraud. This is the second arrest by CGST and Mumbai Central Excise officials in last 2 days.

The department has launched a drive against fake invoice racketeers who try to defraud government exchequer and lead to unhealthy competition with honest taxpayers. This is a step to highlight the department’s commitment and support to honest taxpayers.

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