Mumbai, March 1: CGST Mumbai Central Commissionerate arrested the directors of two companies for allegedly availing of tax credit in a fraudulent manner. Director, Shah Brothers Ispat Pvt Ltd, Sanjiv Pravin Mehta, and Director, V N Industries, Vinaykumar D Arya, were arrested for availing of ineligible credit of Rs. 5.20 crore and Rs. 2.03 crore, according to News On Air.

The investigation has revealed that the companies were only exchanging invoices for so-called sale and purchase. There was only paper and invoice movement, but no actual sale or purchase of goods. These exchanges were being done with a malafide intention to defraud the exchequer by opening Letters of Credit on fake purchase transactions.