The Central Goods and Services Tax (CGST) Delhi South Commissionerate has arrested a partner of an iron and steel trading firm in a case involving alleged fraudulent availment, utilisation and passing on of more than ₹15.78 crore in inadmissible Input Tax Credit (ITC). The alleged transactions were supported by bogus invoices worth approximately ₹87.67 crore, according to the Finance Ministry.
The arrest followed an investigation by the Anti-Evasion Branch of the CGST Delhi South Commissionerate. Investigators found that invoices used by the firm had been issued by multiple suppliers, several of which were reportedly non-existent, non-functional, suspended or cancelled. Field verification also indicated that some suppliers did not have genuine business activity at their declared addresses.
Bogus Invoices Worth ₹87.67 Crore Under Investigation
According to the Finance Ministry, the case involves more than ₹15.78 crore of inadmissible ITC allegedly generated through invoices with a total value of around ₹87.67 crore.
The investigation examined whether the transactions recorded through these invoices were supported by genuine supplies and actual movement of iron and steel goods. Verification of supplier businesses reportedly raised questions about the authenticity of the transactions.
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ITC Allegedly Claimed Without Actual Receipt of Goods
Further investigation reportedly found that the ITC was allegedly claimed without the actual receipt of goods. Authorities also alleged that the credit was subsequently passed on to other recipients through invoices that were not supported by corresponding supplies.
The investigation therefore covers the alleged availment and utilisation of ITC as well as its subsequent passing on to other entities. The case concerns a firm engaged in the trading of iron and steel products.
Officials also relied on evidence gathered during the investigation and statements recorded under Section 70 of the Central Goods and Services Tax Act, 2017.
Accused Remanded to 14 Days’ Judicial Custody
The accused partner was arrested on September 14, 2026, following the investigation and statements recorded under the CGST Act. He was subsequently produced before the Patiala House Court, which remanded him to judicial custody for 14 days.
The investigation remains focused on the alleged use of invoices that were not backed by genuine supplies. Authorities are also examining the supplier entities involved and the financial and tax records connected with the transactions.
Conclusion
The CGST action highlights the department’s continuing investigation into alleged misuse of the ITC mechanism through unsupported invoices. The present case involves an alleged ₹15.78-crore ITC irregularity linked to invoices worth approximately ₹87.67 crore, with further investigation expected to establish the complete financial and transactional trail.