The Ministry of Finance’s anti-evasion team at the Central Goods & Services Tax (CGST) Delhi South office has arrested the owner of a company that was illegally claiming input tax credits. The case involves over Rs. 25.22 crore in fraudulent tax claims made through fake invoices worth approximately Rs. 140.14 crore. The firm traded in iron and steel goods.
What the investigation found
Officers from the Anti-Evasion Branch discovered that the company claimed input tax credits based on invoices issued by multiple suppliers. Many of these suppliers did not actually exist, were not operating, had been suspended, or had their registration cancelled.
When investigators visited the declared business locations of certain suppliers, they found no genuine business activity was taking place there. The company claimed tax credits for goods it never actually received. In several cases, the company then passed these illegally claimed tax credits to other parties by issuing invoices for goods that were never actually supplied.
The proprietor was arrested on September 17, 2026, under Section 69 of the CGST Act, 2017. A court in Patiala House ordered him to be held in judicial custody for 14 days. The investigation is still ongoing.
What this means for you
This action is part of the government’s broader effort to crack down on companies that misuse the input tax credit system. Fraudulent claims like these inflate the amount of tax credits available in the economy and reduce government revenue. By targeting firms that issue fake invoices or claim credits without actual purchases, the tax authorities aim to make the goods and services tax system more honest and prevent honest businesses from facing unfair competition from those who cheat the system.