Palghar: CGST officials bust racket involving fraudulent claim of Rs 25 cr tax credit through fake firms

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The Central GST officials discovered a scheme in Palghar, Maharashtra, involving the fraudulent claim of input tax credit (ITC) worth around Rs 25 crore using phoney firms and invoices, stated an official statement.

The fraud was discovered after the CGST's Palghar commissioner (Mumbai zone) launched a probe into Hacnup Trading (OPC) Private Limited, only to discover its non-existence, according to the source, reported PTI.

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According to the report, Nilesh B Shah, the company's director, revealed to authorities that he founded the company and countless other fictional firms at the request of Kiran Kantharia and Manish Shah in order to commit GST fraud.

Further inquiry found that Kantharia's fictitious enterprises illegally claimed "ineligible ITC of Rs 11.02 crore and availed ITC of Rs 14.7 crore" using bogus invoices without actually supplying goods or services, the PTI report added further.

Reportedly, the input tax credit (ITC) is the GST paid by a registered entity on the purchase of goods or services used as inputs in its business operations. ITC can be credited against the GST payable on sales if certain conditions are met.

The officer revealed that Kantharia was arrested under the CGST Act based on the information acquired during the investigation, the PTI report added.

According to an official, police in Maharashtra's Thane district confiscated banned gutka and tobacco goods worth approximately Rs 8 lakh on Friday, stated another PTI report.

According to a report, acting on a tip-off, Shanti Nagar police in the Bhiwandi district searched a paan booth on Wednesday and discovered it to be keeping and selling gutka and tobacco goods, which are illegal in the state due to public health risks.

The seized commodities are worth Rs 7.77 lakh, he said, adding that an FIR has been filed against Farman Ahmad Manzoor Ansari (24), who ran the stand, and three other people, the PTI report added.

In another incident, two people have been taken into custody by the Palghar district police in Maharashtra for allegedly smuggling illegal tobacco goods worth more than Rs 2 lakh, an official said on Friday, per a PTI report.

With PTI inputs