Mumbai, Oct 10 (PTI) Tax authorities in Mumbai have busted a fake input tax credit (ITC) racket involving Goods and Services Tax (GST) of Rs 44 crore and arrested its mastermind from adjoining Thane, an official said on Thursday.
The racket was uncovered by the Central Excise and GST Commissionerate of CGST Mumbai Zone.
The arrested man, Hitesh Vasa, had allegedly formed and registered 22 non-bonafide firms as well as companies and received and retained the benefits arising out of the web of those firms, the official said.
Vasa availed of inadmissible ITC of approximately Rs 48 crore. He also passed on the fraudulent ITC of Rs 44 crore without actual movement of goods or services, the official said.
The alleged mastermind of the racket was also involved in circular trading to inflate turnover of these non-genuine firms, he said.
Under the GST system, ITC is a mechanism that allows businesses to offset the tax they pay on their purchases against the tax they collect on outputs, thus preventing double taxation.