Eight textile dyeing and printing mills in the city's Sachin and Pandesara GIDC were held for claiming input tax credit (ITC) on fake tax invoices and thereby reducing their liability to pay VAT by the VAT department of state government on Friday.

Under the VAT system, bogus dealers (dealers who take registration on wrong credentials and then disappear) issue fake tax invoices on the strength of which genuine dealers claim input tax credit and reduce their VAT liability. Now, the VAT department has tightened the noose on such mill owners. A huge ITC racket is likely to be unearthed.

Official sources said VAT officials have seized documents that had fake entries and invoices during the raid.

The dyeing and printing mill owners have been purchasing raw materials like lignite, oil, chemicals and dyes, fabrics, etc, for manufacturing printed and dyed fabrics. These mill owners produced fake tax invoices to claim ITC.