Date: 2026-03-09Category: Press ReleaseState: Union GovernmentCountry: India
CGST Delhi South Commissionerate arrests director of a company for fraudulent availment of Input Tax Credit (ITC) amounting to ₹60.59 crore through bogus invoices of ₹397.23 crore
The CGST Delhi South Commissionerate has arrested a Director of a private limited company for the fraudulent availment of Input Tax Credit (ITC) totaling ₹60.59 crore. This was achieved through the use of bogus invoices amounting to ₹397.23 crore. The investigation revealed that the supplier's declared place of business was a co-working space with no evidence of genuine business activity, and the arrested director could not provide a satisfactory explanation for the firm's operations or payment methods. The offense violates Section 16 of the CGST Act, 2017, and is punishable under Section 132. The director has been remanded to judicial custody for 14 days. In the current fiscal year, the CGST Delhi South Commissionerate has initiated prosecutions against 45 fraudsters under the CGST Act, 2017.
Key Entities Referenced
CGST Act, 2017: The primary law under which the fraudulent activities are investigated and prosecuted, specifically concerning Input Tax Credit (ITC) and its related sections.
CGST Delhi South Commissionerate: The governmental body responsible for the enforcement actions, arrests, and prosecutions related to GST evasion.
Input Tax Credit (ITC): The financial mechanism that was fraudulently availed, representing a key element of the alleged crime.
Section 16 of the CGST Act, 2017: Specific section of the CGST Act, 2017, that was violated by the fraudulent availment of Input Tax Credit.
Section 132 of the CGST Act, 2017: The section of the CGST Act, 2017, that defines the punishment for offenses related to fraudulent ITC claims.
Ministry of Finance
CGST Delhi South Commissionerate arrests
director of a company for fraudulent availment of
Input Tax Credit (ITC) amounting to ₹60.59 crore
through bogus invoices of ₹397.23 crore
Posted On: 09 MAR 2026 7:49PM by PIB Delhi
As part of its ongoing enforcement drive against fraudulent Input Tax Credit (ITC) claims, the Anti-
Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate, has arrested
a Director of a private limited company engaged in trading of Smartphones for fraudulent availment of
Input Tax Credit (ITC) amounting to ₹60.59 crore through bogus invoices of ₹397.23 crore. This violates
Section 16 of the CGST Act, 2017 and is punishable under Section 132.
Analysis of GST return data and verification of the declared place of business of the supplier entity
revealed that the premises was merely a co-working space and no books of accounts, stock, invoices or
any evidence of genuine business activity was found.
During the course of investigation, the director failed to provide satisfactory explanation regarding the
operations of the said firm and the mode of payment for the alleged transactions. No verifiable trail of
payment corresponding to the purported supply of goods has been established so far, which further
indicates that the transactions are non-genuine paper transactions created solely for fraudulent passing and
utilisation of Input Tax Credit.
The arrested director was found to be direct benefactor of this evasion. The offence is covered under
Section 132(1)(c) and is punishable under Section 132(1)(i) of the CGST Act, 2017. The person arrested
was produced before the Duty Magistrate and has been remanded to judicial custody for 14 days.
Further, CGST Delhi South Commissionerate, in the current fiscal year, has already launched
prosecutions against 45 fraudsters under the CGST Act, 2017.
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