Gurugram, April 16 : Two people were arrested by a Special Investigation Team (SIT) for their alleged involvement in the goods and services tax (GST) fraud, police said on Monday.
SIT chief Sandeep Kumar said those arrested were identified as an assistant from Gurugram Excise and Taxation department, Gaurav Bahal, and a chartered accountant, Rakesh Arora.
Arora was handed over to the investigation agency for three days police remand while Bahal was sent to jail by a local court.
In an FIR filed in February, after GST dealers fraudulently tried to claim input tax credit, the state excise and taxation department registered a case against a firm purportedly registered as M/s Vipin Enterprises.
Input tax credit is a tax that a business pays on a purchase, which it can use to reduce its tax liability when it makes a sale.
In other words, businesses can reduce their tax liability by claiming credit to the extent of GST paid on purchases.