A man from Gujarat has been arrested for allegedly issuing fake invoices to claim Rs. 177.64 crores of ITC (Input Tax credit). The person is a resident of Vadodara and is identified as Ehsas Ali Saiyad. He is the mastermind of the scam involving issuing of fake invoices, said the office of the Central GST and Central Excise Commissionerate in a release in Gandhinagar.
Input Tax Credit (ITC)?
Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs. Say, you are a manufacturer – tax payable on output (FINAL PRODUCT) is Rs 450. tax paid on input (PURCHASES) is Rs 300. You can claim INPUT CREDIT of Rs 300 and you only need to deposit Rs 150 in taxes.
Ehsas Ali Saiyad allegedly floated 66 fake companies with as many dummy owners in whose name he issued tax invoices to claim input tax credit (ITC), it said. The accused obtained GST registration, GST identity cards, login-password, SIM cards, bank accounts and online passwords in the name of these dummy owners, said the commissionerate.
“The accused would issue fake bills in the name of the entities created by him. He issued tax invoice of taxable value of Rs 1,210 crore to claim input tax credit of Rs 177.64 crore,” it said. He was arrested under provisions of the CGST Act and further investigation was on, said the release.