Date: 2025-08-04Category: Not ApplicableState: Union GovernmentCountry: India
CGST Delhi South Commissionerate busts a racket that fraudulently availed Input Tax Credit (ITC) worth ₹47.12 crore in iron & steel sector; one arrested
**Summary:**
The Anti-Evasion Branch of the CGST Delhi South Commissionerate has uncovered a large-scale Input Tax Credit (ITC) fraud involving a taxpayer based in Naraina and operating in the iron and steel sector. The investigation revealed fraudulent availment and passing on of ITC totaling ₹47.12 crore, based on bogus invoices against a taxable value of approximately ₹261 crore, without actual supply of goods. The firm fraudulently availed ITC from cancelled and suspended GSTINs, violating the CGST Act 2017. A search conducted under Section 67(2) of the CGST Act, 2017 found the firm non-functional at its declared business place. The proprietor was arrested on August 1, 2025, under Section 69 read with Sections 132(1)(b) and 132(1)(c) of the CGST Act 2017. This action is part of a broader initiative by the CGST Delhi South Commissionerate to dismantle fake ITC networks, utilizing data analytics and supply chain mapping to identify and disrupt fraudulent activities.
Key Entities Referenced
Ministry of Finance: The government ministry responsible for financial matters.
CGST Delhi South Commissionerate: A division of the Central Goods and Services Tax (CGST) department responsible for the Delhi South region.
Input Tax Credit: A mechanism to avoid double taxation under GST.
Naraina, Delhi: A location in Delhi where the taxpayer engaged in trading of iron and steel items is based.
CGST Act 2017: The Central Goods and Services Tax Act enacted in 2017.
Section 672 of the CGST Act, 2017: The section of the CGST Act 2017 pertaining to search powers.
Section 69 of the CGST Act 2017: The section of the CGST Act 2017 pertaining to power to arrest.
Sections 1321b and 1321c of the CGST Act 2017: The sections of the CGST Act 2017 pertaining to offences and penalties.
Ministry of Finance
CGST Delhi South Commissionerate busts a racket
that fraudulently availed Input Tax Credit (ITC) worth
47.12 crore in iron & steel sector; one arrested
Posted On: 04 AUG 2025 6:17PM by PIB Delhi
The Anti-Evasion Branch of CGST Delhi South Commissionerate has unearthed a large-scale fraudulently
availed Input Tax Credit (ITC) racket involving a Naraina-based taxpayer engaged in trading of iron and steel
items. The case involves fraudulent availment and passing on of ITC totaling ₹47.12 crore, based on bogus
invoices against a taxable value of approximately ₹261 crore, without any actual supply of goods.
Acting on specific intelligence developed by the Anti-Evasion wing, an investigation was initiated into a
suspicious supply chain. The inquiry revealed that the firm had fraudulently availed and passed on ITC
without any actual movement of goods. Further investigation established that the firm had availed ITC from
cancelled and suspended GSTINs, in gross violation of the provisions of the CGST Act 2017.
The firm was found to be non-functional at its declared place of business during a search conducted under
Section 67(2) of the CGST Act, 2017. The proprietor was arrested on 01.08.2025 under the provisions of
Section 69 read with Sections 132(1)(b) and 132(1)(c) of the CGST Act 2017.
This case forms part of the broader initiative undertaken by the CGST Delhi South Commissionerate to
dismantle fake ITC networks that lead to significant revenue leakage and undermine fair market practices.
The department is leveraging data analytics and supply chain mapping tools to proactively identify and disrupt
such fraudulent activities.
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NB/KMN
(Release ID: 2152229)