The Directorate General of GST Intelligence (DGGI) has busted an allegedly bogus Input Tax Credit (ITC) claims fraud of Rs 1,196 crore following raids at multiple locations in Pune, Delhi, Noida, and Muzaffarnagar late Wednesday night exposing a sophisticated network of bogus companies engaged in fraudulent GST transactions.
Statement Issued By The Directorate General Of GST Intelligence
“The fraudulent network facilitated availing and passing of fake ITC worth Rs 1,196 crore. The accused had set up shell entities with no legitimate business operations, generating fake invoices and e-way bills to create a facade of genuine trade” said DGGI statement.
According to the tax officials, the e-way bills had no RFID movements associated with them, confirming the absence of an actual supply of goods. The raids led to the seizure of original invoices, financial records, company stamps, and seals indicating centralized control over multiple shell firms leading to the arrest of a private limited firm director in Muzaffarnagar.
The investigation exposed organised cartel maintained a database of addresses, identities, email IDs and phone numbers strategically rotated to obtain new GST registrations and evade detection. The newly created firms had directors or proprietors selected from the repository to enable sustain illicit operations of bogus ITC claims.
