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NEW DELHI : Goods and Services Tax officials have busted a racket of firms dealing in bogus input tax credit and have arrested two businessmen in Maharashtra, the finance ministry said in a statement, indicating that efforts to check tax frauds will intensify.

GST officials in the Mumbai zone arrested proprietors of two firms that are engaged in the trading of ferrous waste and scrap. The firms were allegedly availing of input tax credit fraudulently and passing on without receiving the goods or services, in violation of the provisions of CGST Act 2017, the ministry said.

Both these firms were availing bogus input tax credit from fake entities and were passing on the same to other entities of this network, the ministry said. The arrested executives have been remanded to judicial custody for a fortnight. Officials have detected tax credit related irregularities of 22 crore in this case.

“This operation is a part of a large-scale effort by CGST Mumbai zone to stamp out fake input tax credit networks, which have been causing unhealthy competition with honest taxpayers and defrauding the exchequer of its rightful taxes. The department is going to intensify the drive against the fraudsters and tax evaders in the days to come," the ministry said in the statement.

The authorities are utilising data on e-way bills, information captured at toll booths about goods shipments and the information furnished in tax returns to identify mismatches in claims. This helps in zeroing in on possible cases of tax evasion.

Officials in Mumbai recently detected alleged tax evasion by a cryptocurrency exchange of over 40 crores and the assessee has deposited the entire amount along with interest and penalty totalling over 49 crores, according to an update from the Central Board of Indirect Taxes and Customs (CBIC) posted on its website.

 

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