New Delhi: In a major crackdown on tax evasion, the Anti-Evasion Branch of the Central Goods and Services Tax (CGST), Delhi South Commissionerate, has uncovered fraudulent availment and utilisation of Input Tax Credit (ITC) exceeding ₹8 crore and arrested a company director involved in the case.
According to officials, the accused is a director of a company dealing in assorted goods and was found to have fraudulently availed and utilised ineligible ITC in violation of Section 16 of the CGST Act, 2017.
The investigation was initiated based on intelligence developed through data analytics, which indicated that the taxpayer had claimed ITC without any actual supply of goods. The suppliers involved in the transactions were either suspended, cancelled suo-moto, or had their registrations cancelled upon application.
Further probe through backward supply chain analysis revealed that there were no genuine inward supplies at multiple levels (L1, L2, and L3), effectively breaking the credit chain and making the ITC inadmissible under the provisions of the CGST Act. It was also found that the accused had passed on such ineligible ITC to buyers without any underlying supply of goods.
The statement of the company’s director was recorded under Section 70 of the CGST Act on April 16, 2026, during which he admitted to controlling and conducting all business transactions of the company. However, he failed to produce any documentary evidence to support the authenticity of these transactions.
Officials stated that the offences committed fall under cognizable and non-bailable provisions as per Sections 132(1)(b) and 132(1)(c), punishable under Section 132(1)(i) of the CGST Act. The accused was arrested under Section 69(1) of the Act and subsequently produced before the Patiala House Court, which remanded him to judicial custody until April 30, 2026.
Further investigation in the case is currently underway.
