New Delhi: CGST Delhi South Commissionerate arrested a firm partner in a fraudulent ITC case involving over ₹15.78 crore in inadmissible credit.
The Anti-Evasion Branch arrested the partner of an iron and steel trading firm on September 14, 2026. Officials accused the firm of fraudulently claiming, using and passing on ITC.
The case involved bogus invoices worth about ₹87.67 crore. Investigators found that the firm claimed ITC based on invoices from multiple suppliers.
Several of those suppliers did not exist or had stopped functioning. Others had suspended or cancelled registrations, according to the investigation.
Field verification also found that some suppliers had no genuine business activity at their declared business locations. Officials therefore questioned the validity of the transactions.
The investigation further found that the firm claimed ITC without actually receiving the goods. It also passed on the credit to other recipients through invoices without matching goods supplies.
Officials gathered evidence during the investigation and recorded statements under Section 70 of the CGST Act, 2017. Based on that evidence, they arrested the accused under Section 69 of the Act.
Fraudulent ITC case leads to judicial custody
The authorities produced the accused before the Patiala House Court after his arrest. The court then remanded him to judicial custody for 14 days.
The fraudulent ITC case remains under investigation. CGST Delhi South officials said further inquiry was continuing.
The enforcement action formed part of the department’s ongoing drive against fraudulent Input Tax Credit claims. The investigation focused on the alleged use of invoices that did not represent genuine supplies.
Officials examined the suppliers connected with the transactions. Their field checks identified firms that were non-existent, non-functional, suspended or cancelled.
The investigation also examined the movement of ITC between the trading firm and other recipients. Officials found that the firm allegedly passed on credit through invoices without corresponding supply of goods.
The case involved both the availment and utilisation of inadmissible ITC. It also covered the alleged passing on of such credit to other recipients.
The accused was arrested on September 14 under the provisions of the CGST Act, 2017. The court’s 14-day judicial custody order followed his production before the court.
Further investigation will examine the transactions and other aspects of the case, according to the CGST Delhi South Commissionerate.
