Delhi CGST Cracks Down On ₹8 Crore ITC Fraud, Company Director Arrested

The Anti-Evasion Branch of the Central Goods and Services Tax (CGST), Delhi South Commissionerate, has arrested a company director for allegedly fraudulently availing and utilising Input Tax Credit (ITC) exceeding ₹8 crore, in violation of provisions under the CGST Act, 2017.

The action forms part of an ongoing enforcement drive targeting ITC fraud. Officials said the company, engaged in trading assorted goods, claimed ineligible tax credit without any corresponding supply of goods or services, breaching Section 16 of the Act.

Investigations, supported by data analytics, revealed that the firm had availed ITC from suppliers whose registrations were either suspended, cancelled suo motu, or terminated upon application. A detailed backward supply chain analysis found no evidence of actual inward supplies across multiple levels—L1, L2 and L3—effectively breaking the credit chain and rendering the claims inadmissible.

Authorities further alleged that the company passed on this ineligible ITC to its buyers despite the absence of genuine transactions.

The director’s statement was recorded under Section 70 of the CGST Act on April 16, 2026, during which he admitted to overseeing and executing the firm’s transactions. However, he failed to provide documentary proof to support the legitimacy of the claimed supplies.

Officials stated that the offences fall under cognisable and non-bailable provisions of Section 132 of the CGST Act. The accused was subsequently arrested under Section 69(1) and produced before the Patiala House Court, which remanded him to judicial custody until April 30, 2026.

Further investigation into the case is ongoing, officials said.