In a case of availing GST Input Tax credit worth over Rs.51 crore without actual supply of goods, Patiala House Court, New Delhi has cancelled bail for Rajiv Malhotra, Director, M/s Malhotra Cables Pvt. Ltd. (MCPL), Moti Nagar, Delhi. The offence is punishable under section 132 of the Central good and services Tax Act 2017.
In March 2019, MCPL premises in Moti Nagar, Najafgarh Road Industrial Area was attached and goods valued over Rs.30 crore were seizedon an order of Pr. Commissioner, CGST Delhi West.The department contended that Rajiv Malhotra is a habitual offender. He is already on bail for a similar offence. He has evaded Tax to the tune of Rs.51,76,53,692/- by availing the Input Tax Credit in respect of 7 entities out of which 4 are dummy entities/firms.
MCPL manufactures automotive cables and uses copper rods and copper scraps as raw material and purchase the same from third party suppliers.The company is alleged to have availed tax credit from several entities as well as passed on such credit without actual supply of goods to several other parties which are different legal entities, other than MCPL. Against these fraudulently obtained invoices, they avail input tax credit of GST which is further used to set-off their GST liability arising on account of actual sales of finished goods, which otherwise they would have had to pay in cash as statutory duty.The offence also includes that there are several other such entities whose entire existence is only for Input tax credit of GST without actual supply of goods.
