CGST Delhi Uncovers ₹8 Crore Fake ITC Scam, Director Arrested
April 17, 2026
Ett News / New Delhi
The Anti-Evasion Branch of the CGST Delhi South Commissionerate has arrested a company director for allegedly availing and passing on fraudulent Input Tax Credit (ITC) worth over ₹8 crore in violation of the CGST Act, 2017.
Officials detected the fraud through data analytics, which showed that the company claimed ITC without actual supply of goods. The suppliers linked to the transactions were either suspended or had their GST registrations cancelled, indicating fake billing activities.
Investigators conducted a backward supply chain analysis and found no genuine inward supplies at multiple levels, breaking the ITC chain and making the credit inadmissible under Section 16 of the CGST Act. They also discovered that the company passed on ineligible ITC to buyers without any real transactions.
Authorities recorded the director’s statement on April 16, during which he admitted to controlling and managing the company’s transactions. However, he failed to produce documents to verify the authenticity of those transactions.
The department arrested him under relevant provisions of the CGST Act for committing cognizable and non-bailable offences. Officials produced him before the Patiala House Court, which remanded him to judicial custody till April 30.
The CGST department said further investigation is underway to identify the full extent of the fraud and possible involvement of other entities.
CGST ITC Fraud GST Scam Delhi South Commissionerate Input Tax Credit Fake Billing GST Violations Section 132 CGST Act Tax Evasion Financial Fraud Arrest Data Analytics Shell Suppliers Judicial Custody
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