The CGST Delhi South Commissionerates Anti-Evasion Branch has exposed a significant Input Tax Credit (ITC) fraud scheme. The investigation targeted a Naraina-based iron and steel trader who fraudulently claimed and passed on ITC worth Rs. 47.12 crore, based on bogus invoices for approximately Rs. 261 crore in taxable value, with no actual movement of goods.

Acting on intelligence, the Anti-Evasion wing initiated an inquiry that revealed the firm had illegally availed ITC from cancelled and suspended GSTINs, violating the CGST Act 2017. During a search, authorities found the business to be non-operational at its registered location. The proprietor was arrested on August 1, 2025, under the provisions of the CGST Act 2017 for fraudulent activities. This action is part of the CGST Delhi South Commissionerates ongoing efforts to dismantle fake ITC networks that cause substantial revenue loss and disrupt fair competition. The department is using data analytics and supply chain mapping to proactively identify and disrupt such fraudulent operations.

Ministry of Finance

CGST Delhi South Commissionerate busts a racket that fraudulently availed Input Tax Credit (ITC) worth Rs. 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 Rs.47.12 crore, based on bogus invoices against a taxable value of approximately Rs. 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.