The Anti-Evasion Branch of the Central Goods and Services Tax (CGST) Delhi South Commissionerate has arrested a partner of an iron and steel trading firm for involvement in a large-scale fraudulent Input Tax Credit (ITC) scheme. The case involves fake claims worth over Rs. 15.78 crore using bogus invoices totalling approximately Rs. 87.67 crore.
What the investigation found
Officers discovered that the firm had claimed ITC based on invoices from multiple suppliers, many of which did not actually exist, were not operating, had their licences suspended, or had been cancelled. Field checks showed that several of these suppliers had no genuine business presence at their registered locations.
The investigation also revealed that:
- The firm claimed ITC without receiving the goods mentioned in the invoices
- The firm passed on this fraudulent ITC to various buyers by issuing invoices for goods that were never actually supplied
- Statements recorded under Section 70 of the CGST Act, 2017 provided evidence supporting the charges
The accused partner was arrested on 14 September 2026 under Section 69 of the CGST Act, 2017. He was then produced before the Patiala House Court, which ordered him to be held in judicial custody for 14 days while the investigation continues.
What this means for you
This case shows how authorities are targeting businesses that misuse the ITC mechanism to evade taxes. If you are a trader or business owner, you should maintain complete documentation of all goods received and verify the authenticity of your suppliers. Claiming ITC on fake or inflated invoices is a serious criminal offence that can result in arrest and imprisonment, separate from any tax penalties.