CGST Gurugram Detects Alleged 200 Crore Input Tax Credit Fraud

GURUGRAM: The Anti-Evasion wing of CGST Gurugram has arrested four people in connection with an alleged input tax credit fraud estimated at about 200 crore. Those arrested include two chartered accountants and two former co-founders of an automobile-service firm.

According to the allegations under investigation, a network of around 30 shell companies was used to issue invoices without the actual supply of goods. Such invoices were allegedly used to pass or claim input tax credit, creating a paper trail of transactions that the authorities say did not represent genuine commercial movement.

The four accused have been sent to 14 days of judicial custody. Judicial custody is part of the investigation and court process; it is not a finding of guilt. Every accused person is entitled to challenge the allegations, seek appropriate legal remedies and require the prosecution to prove its case.

The inquiry is likely to depend heavily on company records, invoice chains, tax filings, bank transactions and the relationship between the entities involved. Investigators will have to establish whether the companies carried out real business, whether goods were supplied and how any disputed credit moved through the alleged network.

The role attributed to professionals and former company founders will also require individual examination. Association with an entity or profession does not by itself prove participation in a fraudulent arrangement. Responsibility must be determined on the basis of specific acts, records and evidence linked to each person.

Input tax credit is intended to prevent cascading taxation by allowing eligible businesses to set off tax paid at an earlier stage. When invoices are allegedly generated without an underlying supply, the credit system can be misused and public revenue may be affected. That is why anti-evasion investigations trace both the origin of invoices and the beneficiaries of credit.

The 200-crore amount remains an estimate attached to the alleged fraud and may be examined further as records are verified. The case will proceed through investigation and adjudication, and the allegations should not be treated as established facts unless upheld by the competent court or authority.