Delhi Police: A team has busted a GST fraud amounting to approximately ₹128 crore and arrested 6 culprits.
The culprits manipulated cash transactions by issuing fake invoices through more than 250 shell companies.
Utilizing technical tracing, the police team conducted a raid in the Daryaganj area and apprehended 5 of the culprits.
Cash amounting to ₹51.12 lakh, 15 mobile phones, 2 laptops, 2 cars, and a large number of invoices and other documents belonging to fake companies were recovered.
GST Fraud News: A GST scam worth ₹7 crore has been uncovered. In connection with the case, the police have identified 13 shell companies that were used to generate fake invoices. According to the police, the accused defrauded a local businessman under the pretext of arranging a bank loan and obtained his GST credentials. Subsequently, these very details were used to carry out fraudulent transactions. This GST fraud took place in Pilibhit, Uttar Pradesh.
Fraud Committed by Posing as a Loan Agent
The complainant, Mohammad Naeem, is a resident of Mohalla Chhota Khudaganj and the proprietor of Shahji Enterprises. He is engaged in the business of handpump installation and labor services. In his complaint, Naeem stated that on January 12, 2026, an individual named Ajmal—alias Sameer Rana—approached him posing as a loan agent and, under the pretext of facilitating a loan, obtained his GST ID, password, and Aadhaar details.
Returns Filed for Purchases Worth ₹7 Crore
This matter came to light on March 13, when officials from the GST Department contacted Naeem and informed him that purchases amounting to approximately ₹7 crore had been recorded under his GST ID, yet no returns had been filed. Subsequently, when Naeem confronted the accused, he was verbally abused and threatened with dire consequences.
Bills Generated in the Names of 13 Fraudulent Companies
Kotwali In-charge Satyendra Kumar stated that a case has been registered based on the victim’s complaint, and an investigation is underway. During the investigation, the police discovered that fraudulent bills had been generated in the names of approximately 13 fictitious companies. He added that the records of all 13 companies are being scrutinized to expose the entire syndicate. Further action will be taken based on the evidence gathered.
Lucknow – A significant controversy has emerged regarding the alleged investment of billions of rupees in land by officials from the State Tax Department. Reports indicate that in an effort to conceal undeclared income amounting to billions, these officials have acquired mountains rich in dolostone, sandstone, and limestone located in Mirzapur and Sonbhadra.
As investigations into land transactions involving a builder in Ambedkar Nagar gain momentum, several high-ranking officials are now under scrutiny. Each mountain reportedly generates an average annual royalty of between Rs 20 to 30 crore.
The introduction of the GST system in the latter half of 2017, coupled with the economic impact of demonetization, created a fertile ground for corruption. The two ensuing years presented an array of opportunities for illicit gain. Sources suggest that a builder from Awadh has been used as a front, while a powerful group within the department diverted profits into the mountains of Purvanchal.
Alarming reports state that this group has wreaked havoc in the hills of Sonbhadra and Mirzapur, engaging in the purchase of mountains featuring hollow stone, limestone used in cement production, and even coal deposits. Historically, dolostone in this region was priced at Rs 160 per cubic meter; however, land sales through tenders have recently soared to Rs 3000 per cubic meter.
The introduction of an e-tendering system has further escalated these rates, with royalty fees climbing from Rs 400 to Rs 1000 per cubic meter. The royalty for mining can range from 100,000 to 500,000 cubic meters annually, implying that a single mountain’s royalty could average between Rs 20 to 30 crore.
Syndicates have been reportedly acquiring mountains at inflated tender rates—raising prices ten to twenty times—while utilizing the facade of lawful business activities to launder significant amounts of black money. Within this scheme, the focus appears to be less on generating legitimate profits and more on squandering undeclared funds.
As more details emerge, the implications of this ongoing investigation could reveal a deeper network of corruption within the State Tax Department and highlight the urgent need for accountability in managing natural resources.
Lucknow – An investigation into registries has revealed that nearly 50 officers from the State Goods and Services Tax Department have been implicated in purchasing land worth billions. Initial findings indicate that over 200 crore rupees have been spent on land, both registered and unregistered, primarily through a prominent builder in the Mohanlalganj area.
So far, land valued in crores has been discovered under the names of 11 officers. The investigation regarding the officials’ acquisition of such valuable real estate through a builder in the Awadh region has been escalated to government scrutiny. After a preliminary examination validated the complaints, authorities have ordered a detailed investigation and obtained copies of registration forms from the registry office.
The investigation revealed that the implicated officers, many of whom have served in the Flying Squad and Special Investigation Team, have invested substantial amounts in the builder’s projects. These officers were often stationed in lucrative positions across various districts, including Ghaziabad, Agra, Lucknow, Kanpur, Varanasi, Moradabad, and Meerut. The current records show that land papers have been traced back to officials posted in 10 districts, including Saharanpur, Lucknow, Azamgarh, Lakhimpur Kheri, Mirzapur, and Kanpur. Among those identified are Assistant Commissioners, Deputy Commissioners, Joint Commissioners, and Additional Commissioners.
According to sources within the department, the COVID-19 pandemic turned into a period of substantial financial gain for many departmental officers. Those who were posted before 2020 remained in their positions for up to three years without transfer, allowing some officers to stay in the same locale for five years. During this extended tenure, reports suggest that these officials amassed so much wealth that they found it challenging to spend it.
Consequently, a significant portion of this excess wealth was allegedly funneled to the builder for investments in land along Mohanlalganj and Sultanpur Road. Reports indicate that this builder is a close relative of a senior official within the department, which facilitated his entry into the system, allowing him to propose spending the amassed money openly.
As the investigation unfolds, further actions and potential repercussions for the involved officials are anticipated.
On September 13, 2025 (Saturday), a man from Ambur was arrested by the GST Chennai Outer Commissionerate for orchestrating a fraudulent Input Tax Credit (ITC) racket worth ₹11.90 crore.
According to GST officials, the accused had arranged multiple GST registrations using false documents and addresses. An official remarked, “He created dummy firms that issued fraudulent tax invoices without any genuine transactions.” These invoices were subsequently exploited by various firms to falsely claim input tax credits (ITC), with the accused collecting commissions from the beneficiaries.
Officials have reported that the fraudulent input tax credit involved a staggering ₹11.90 crore, associated with an invoice value of ₹238 crore. Furthermore, all businesses that availed themselves of these fraudulent credits have been identified, and necessary actions will be taken against them.
GUWAHATI: The Directorate General of GST Intelligence (DGGT), Guwahati Zone, has uncovered a massive Goods and Services Tax (GST) fraud amounting to nearly ₹500 crore. Four individuals have been arrested in connection with the operation, which was being conducted from multiple locations in Beltola.
According to reports, the arrested individuals have been identified as Gaurav Agarwal, Derpak Agarwal, Vinod Agarwal, and Guddu Singh. Officials stated that the group was allegedly running a pan-India fake billing syndicate with links to illegal drug plants in Meghalaya and Arunachal Pradesh. The network extended its operations to Assam, West Bengal, and Delhi.
Investigators revealed that the accused floated several shell companies through which they generated fake invoices. These fraudulent transactions were aimed at evading GST and laundering profits. Acting on specific intelligence inputs, DGGT officials reportedly conducted simultaneous raids at nearly ten locations in and around Beltola. Residences and offices belonging to the accused were searched, leading to the recovery of crucial documents and digital evidence.
The estimated fraud reportedly stands at around ₹500 crore, though this figure could rise as the investigation continues. The four accused have been booked under relevant provisions of the GST Act, and are currently being interrogated to trace the wider nexus behind the racket.
A case of identity theft has come to light in Rajasthan, involving a labourer named Veerdharam. He discovered that a fake firm had been registered in his name in Delhi, which carried out transactions worth over Rs 18 crore. The fraud was uncovered when he attempted to file his income tax return, only to find his PAN, Aadhaar, and mobile number had been misused. Additionally, the firm has reportedly evaded over Rs 3 crore in GST, prompting an investigation by police and GST officials.
Veerdharam, a labourer from Balotra, currently works in Sardarshahar, Churu. He has his TDS deducted from his salary and files his income tax returns every year. This year, when he visited his Chartered Accountant (CA) to file his returns, he learned that a large firm was operating under his name.
The CA informed Veerdharam that a firm called “Virdha Traders” had been registered in his name, located near the Main Gate of Sabzi Mandi Main Market in New Delhi. Veerdharam was shocked to discover this, as he had no prior knowledge of the firm. The GST number issued for the fraudulent firm is 07CKIPR5140J1ZV.
Upon further investigation, authorities found that the fake firm’s address was Ground Floor, House No. 810, North West Delhi. The fraudsters had utilized Veerdharam’s PAN and Aadhaar card to create the company, with the registration completed on 22 January 2025. Moreover, an Aadhaar authentication was marked as ‘successful’ on 10 July.
The CA revealed to Veerdharam that the fraudulent firm had conducted business worth over Rs 18 crore, primarily dealing in copper scrap, rods, copper products, and polythene. The GST accumulated on these transactions exceeded Rs 3 crore. Alarmingly, an OTP sent to Veerdharam’s mobile on 10 July was also part of the scam, indicating that his mobile number was exploited without his knowledge.
Veerdharam filed a written complaint on 24 July at the Gida police station in Balotra. Following this, the police contacted the GST department to fully comprehend the situation. Sources indicate that State GST officers have forwarded the complaint to officials in Delhi, aiming to cancel the fraudulent GST number.
On 25 July, Veerdharam escalated the matter by lodging a complaint with the Central Board of Excise and Customs (CBEC), which was registered under the Delhi zone. He also informed Manish Kumar Jha, the Additional Commissioner at the office of the Principal Chief Commissioner of GST and Central Excise in Delhi.
The police have initiated an investigation into the identity theft. They are working to identify those who misused Veerdharam’s documents and mobile number, seeking to bring them to justice.
This case highlights the urgent necessity for individuals to monitor their personal information and be vigilant against the rising threat of identity theft.
In a major breakthrough, the directorate general of GST intelligence (DGGI), Bhubaneswar zone, has unearthed a massive fraud involving a number of shell companies and fraudulent input tax credit (ITC) transactions worth several crores of rupees.
A statement issued by the DGGI on Thursday said a businesswoman from Rourkela has been arrested in connection with the tax evasion involving creation and operation of 27 fake firms. The total value of the fraudulent transactions is estimated to be over Rs 100 crore.
Acting on the lead obtained during inspection of a Cuttack-based firm, GST officials conducted a search operation at the residential premise of the accused in Rourkela. During the search, several incriminating materials, including fake seals of different firms, mobile phones and documents related to benami firms were seized.
Sources said, the accused had allegedly opened a firm in the name of a lawyer in Cuttack. When the tax officials enquired about the firm, the lawyer stated his ignorance, which led the DGGI uncover the fraud.
Preliminary findings revealed that 27 fake non-existent firms, without any business activity, were run by the woman using forged documents in the name of the dummy persons at various places in Odisha and outside. The firms were used solely for generating fake invoices and e-way bills. The accused allegedly used these entities to create a network of bogus transactions across different locations.
“Initial probe suggested that transactions involving Rs 85 crore were routed through these fake firms in the last few years. The prime suspect has been arrested,” the statement said.
A shocking revelation has been made during the interrogation of the accused of making fake Aadhar and PAN cards from E-Mitra in Shramikpura of Masuria under Devnagar Police Station in Jodhpur, Rajasthan. The accused not only made 240 fake Aadhar-PAN cards and fake seals of government departments and officers in 22 states of the country, but also committed a GST scam of Rs 524 crore. Out of Rs 540 crore, GST claim of Rs 278 crore has been made and the remaining Rs 246 crore GST input pass was made on.
arrested them
Deputy Commissioner of Police (West) Rajarshi Raj Verma said that in this case, Niharika e-mitra operator Praveen Panwar, resident of Masuria UIT Colony and Saddam Hussain, resident of Narayan Nagar in Shobhavton ki Dhani were arrested. After interrogating them, it was found that a big gang was active.
After investigating various aspects, the DST and Cyber Cell, under the leadership of Police Station Officer Somkaran, arrested Kishan Singh, Ranveer Singh, Gajendra Singh, residents of Bhatiyan Ki Dhani in Padsala, Osian, Chailaram Meghwal, resident of Sanwat Kuan Khurd in Bawdi Tehsil and Amit Bhati, resident near Kumharon Ki Bagechi in Masuria.
Other accused on remand
Praveen and Saddam have been sent to jail. Other accused are on remand. Kishan Singh, Ranveer and Gajendra have been taken to another state for investigation. Cyber Cell Head Constable Prem Chaudhary and DST Constable Dalaram played a special role in uncovering the network.
FIR registered taking suo motu cognizance
Also present were Boranada police station in-charge Shakeel Ahmed, Bhagat ki Kothi police station in-charge Rajiv Bhadu, SI Pintu Kumar, Chamna Ram, ASI Hiraram, head constable Sunil Bishnoi, Omaram etc. On getting to know about fake Aadhar cards and making of companies, Devnagar police station took suo motu cognizance and registered an FIR on June 20. A letter has been written to blacklist Praveen’s e-mitra.
Have claimed Rs 278 crore GST
The gang of accused issued fake bills worth crores of rupees. 240 fake firms were created in 22 states. GST worth Rs 524 crore was evaded. Out of this, claims worth Rs 278 crore were taken. GST input worth Rs 246 crore was passed on. The accused identified 44 out of 240 firms with the help of email ID, PAN card and mobile number. The other 196 firms were identified on the basis of other databases.
GST department canceled registrations
Out of 240 firms, GST registration of 152 has been cancelled by the GST department of the respective states. Out of 29 companies in Rajasthan, GST registration of 16 has been cancelled. A total of 18 firms were registered in Jodhpur. Out of these, GST registration of 9 firms has already been cancelled. Tax Anti-Aviation Branch of Central GST Jodhpur visited the addresses of 8 firms on 19 June, but the company operations were not found.
Fake firms were created in these states
The gang committed irregularities in Andhra Pradesh, Assam, Bihar, Delhi, Chhattisgarh, Daman and Diu, Goa, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand and West Bengal.
From Aadhaar card to firm registration, everything is fake
Praveen Panwar used to make fake Aadhar and PAN cards by using fake seal and signature at e-mitra. With this, fake current accounts were opened in the bank. He used to get SIM cards with fake documents and even get GST registration of the firm done by creating fake email ID and fake company. This firm existed only on documents.
Search for master mind, two CAs also involved
Many revelations were made during interrogation of accused Praveen and Saddam. Accused Amit has a pawn shop near Geeta Bhawan, where fake seals of officers of many departments were made. The other four accused had made fake Aadhar cards and handed them over after taking them to Mumbai. The role of CS along with two CAs of Mumbai and Kolkata has also come to light in making the fake company.
Visakhapatnam: Officers of the Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, have arrested a resident of Proddatur in YSR Kadapa district along with three others for allegedly floating 19 fake entities, resulting in a massive fraud of Rs 293 crore. The operation extended across multiple states including Kadapa, Kurnool, Bengaluru, and Hyderabad.
The primary accused, Manohar (34), and his accomplices created bogus entries at various levels across different states to mask the fraudulent transactions, according to investigating officials. They operated a complex network that generated fake invoices amounting to Rs 293 crore in taxable value.
The fraudulent activities involved the passing of fake Input Tax Credit (ITC) to various functional companies and firms, amounting to Rs 30 crore in GST, which allowed them to illegally avail and utilize credits, thereby evading genuine tax payments and inflicting a significant loss on the government exchequer. The arrest of the mastermind behind this bill trading scheme was authorized by the principal additional director of DGGI, VZU MRR Reddy. Manohar has since been presented before the Special Judge Economic Offences Court in Visakhapatnam on December 13, where he was remanded to judicial custody for 14 days.
An official statement highlighted that the DGGI remains vigilant and is consistently combating various strategies used for tax evasion, particularly through the establishment of fake companies and the resultant losses to public revenue.
“Fraudsters employ a multitude of techniques to evade the scrutiny of this agency, such as creating several layers of fake entities across different states. They exploit the credentials of unsuspecting and impoverished individuals by offering incentives for sharing sensitive personal information,” the statement noted.
In the financial year 2024-25, the Visakhapatnam Zonal Unit of DGGI has collected intelligence and initiated around 79 cases involving a taxable value of approximately Rs 465 crore and fake ITC/GST amounting to Rs 84 crore.
The Directorate General of GST Intelligence (DGGI) recently apprehended two masterminds, Manish and his brother Amit, who are implicated in a substantial GST fraud exceeding ₹700 crores. The brothers, residents of Gurmukh Singh Colony in Mandi Gobindgarh, are accused of orchestrating an extensive fraudulent scheme that involved the establishment of fictitious firms through identity theft.
This sophisticated scam facilitated the generation of fake invoices and the filing of input tax credit (ITC) claims, leading to a staggering tax loss of over ₹100 crores for the government.
According to DGGI officials, the duo managed a complex network of dummy firms which passed on the fraudulently acquired ITC to various intermediary companies. The illicit funds from this operation were then funneled into seven Agricultural Produce Market Committee (APMC) accounts, enabling the brothers to withdraw cash exceeding ₹717 crores, primarily through a single bank branch.
In a recent series of raids conducted at both their residential and official premises, DGGI seized a substantial cache of evidence. This included 11 mobile phones, seven pen drives, two laptops, 56 cheque books tied to multiple bank accounts, 27 identity documents, seven stamps, and 46 ATM cards belonging to various individuals.
The brothers have reportedly confessed to their roles in the fraudulent activities and were arrested on October 9. They are currently in judicial custody as the investigation is ongoing.
In response to this incident, DGGI Ludhiana is intensifying efforts to identify additional dummy entities that may be involved in similar fraudulent activities linked to bogus billing and tax evasion. Authorities are ramping up their initiatives to combat the escalating issue of fake billing in the region, with expectations of further arrests to follow in the near future.
New Delhi: The Central Board of Indirect Taxes and Customs (CBIC) on Fri- day suspended a number of central GST officials in Bengaluru after they we- re arrested over extortion charges by the state police. The arrest and suspen- sion came after Chetan Thalagunda Anantharamu, director at Murrelektro- nik Pvt Ltd, was allegedly forced by the GST officials to give money, even when the company’s plea was admitted.
He lodged a complaint with the local police and also shared the screenshot of the website appeal on social media platform X. The firm was registered with the state GST authorities. Bengaluru’s City Crime Branch arrested four officials based on a businessman’s complaint of kidnapping and extortion. The accused include officials of the rank of supe- rintendent, inspector and senior intelligence officer. Our Bureau
The Anti-Corruption Branch of Delhi has unveiled a significant scam involving fraudulent GST refunds within the Trade & Taxes department of the Delhi Government. The investigation has led to the arrest of several individuals, including one GST Officer, three advocates operating fake firms, two transporters, and one proprietor of a bogus company.
Authorities discovered that fraudulent GST refunds totaling approximately Rs 54 crores had been issued to fictitious firms. Additionally, forged invoices amounting to around Rs 718 crores were uncovered.
The scam involved nearly 500 non-existent firms that were allegedly engaged in business activities, including the export of medicines and medical items, solely to claim illegitimate GST refunds.
The probe revealed severe procedural lapses and malpractices by the GST Officer, contributing to substantial financial losses for the government. The investigation is ongoing as authorities work to
address the extent of the fraudulent activities.
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Major Arrest Made in Connection with ₹16,000 Crore GST Scam
In a significant development, the Noida Police (Sector 20) have apprehended an individual with a ₹25,000 reward on his head in relation to the massive ₹16,000 crore GST scam. Anshul Goyal, who had been evading arrest for his involvement in the scam, was detained this morning following a tip-off. This arrest brings the total number of individuals apprehended in connection with the case to 45.
Confirming the arrest, Deputy Commissioner of Police (Crime) Shakti Mohan Awasthi stated that charge sheets have also been filed against two other accused, Vikas Dabas and Kunal Mehta, in court yesterday. The police have filed charge sheets against 38 individuals involved in the scam, and are actively pursuing other suspects linked to the case.
The elaborate scam, which came to light in June 2023, involved the fraudulent acquisition of PAN and Aadhaar cards of numerous individuals across India to establish approximately 4,000 fictitious companies. Subsequently, these entities illicitly claimed Input Tax Credit (ITC) amounting to over ₹16,000 crore. Initial arrests in the case included individuals named Deepak, Vinita, Akash Saini, Vishal, Mohammad Yaseen, Rajeev, Atul Segar, and Ashwini.
Officials Bust Rs 132 Crore Fake GST Invoice Racket, Arrest One
Acting on specific intelligence, officials of the Preventive Unit of Central GST, Belagavi Commissionerate, uncovered a fake GST invoice racket worth Rs 132 crore. The fraudulent scheme involved fake Input Tax Credit (ITC) amounting to Rs 23.82 crore, and led to the arrest of one individual.
The accused, Naqeeb Najeeb Mulla, is the proprietor of Federal Logistics and Company in Belagavi. He was apprehended under Section 69 of the CGST Act, 2024 for his involvement in issuing fake invoices without actual supply of goods/services, thereby availing and passing on fraudulent ITC.
Mulla, who also worked as a tax consultant, established a fictitious proprietary firm named Federal Logistics and Co. Under the guise of managing GST-related matters for multiple firms, he engaged in the manipulation of GST returns.
Furthermore, Mulla illicitly collected cash payments from his clients to fulfill monthly GST liabilities, but diverted the funds for personal gain, leading to embezzlement. He discharged GST liabilities using fake ITC, either through his own firm or other entities under his control.
Confronted with incriminating records and statements from affected clients, Mulla confessed to siphoning off cash through the forgery/editing of monthly GST returns.
Bihar Police have initiated a probe into a GST (goods and services tax) fraud after a private tutor from Muzaffarpur complained that his PAN card was used in procuring two fake GST numbers for firms in Delhi and Kerala.
Rahul Kumar, resident of BMP-6 Durgapuri Colony in Muzaffarpur lodged an FIR at Mithanpura police station in this regard. He told police that the matter was revealed when he went to file his income tax return. His lawyer informed him that two GST numbers had been obtained by using his PAN card.
After which, he went to the GST office and met Deputy Commissioner Satyendra Kumar Sinha. It was found that Rs 40 crore GST dues are pending in his name.
Rahul told police that the first GST number is for a firm named Star Enterprises in Kozhikode, which reportedly deals in aluminum, brass and copper sheets. The second GST number is for RK Traders from Uttamnagar division in Delhi and the firm is into the business of dairy products. He alleged that the GST scam amounts to Rs 40 crore.
Since same mobile number and email address were used in both the states, it is clear that the fraud has been committed by the same person or firm, police said.
Mithanpura police station in-charge Ram Iqbal Prasad said, “An FIR has been registered and investigation is underway. Trainee SI Mithun Kumar has been made the IO in this case.”
“I have never applied for GST and not even have a current account in my name. I earn my livelihood by giving tuitions to children,” Rahul said.
Earlier, a similar GST scam of Rs 64 crore was done in Delhi by using the documents of a mobile mechanic named Shubham of Maharaji Pokhar Mohalla. Shubham too came to know about the matter when he went to file his income tax return.
He had lodged an FIR at the cyber police station on September 20, 2023. After which, the case is being investigated by cyber police station in-charge Seema Devi.
An extensive tax fraud scheme has been exposed in Kerala, as revealed by an investigation conducted by the GST Department. The probe, focusing on the scrap sector, brought to light fraudulent activities amounting to an estimated Rs 1,000 crore in business conducted through counterfeit GST (Goods and Services Tax) bills.
The state government is believed to have suffered losses of up to Rs 180 crore due to this deceitful operation, which was found to be prevalent in seven districts. Approximately 300 officials from the GST Department conducted inspections, uncovering the use of GST registrations under names unrelated to the sector.
During the inspections, officials discovered falsified bills and identified individuals who acquired deceptive registrations to engage in business using these fraudulent documents. The full extent of the fraud can only be determined once the perpetrators are thoroughly interrogated. There are indications that this may be one of the most significant GST scams in the state.
With the arrest of two Haryana-based businessmen, the Noida Police on Wednesday evening claimed to have nabbed the “masterminds” of the ₹10,000 crore GST [good and services tax] fraud case, which came to fore in June last year, senior police officers said.
According to Shakti Avasthy, deputy commissioner of police (crime), the two suspects had claimed over ₹26 crore in input tax credit (ITC) from the government fraudulently, which has been seized by the police from their bank accounts.
On June 1 last year, the Noida police busted a gang suspected of orchestrating the multi-crore fraud. According to police, the gang would register thousands of bogus companies under stolen or fake identities and use them to generate e-way bills and obtain input tax credit (ITC) from the government.
Avasthy, who is leading the investigation in the case, said the two suspects have been identified as Ajay Sharma (28) and Sanjay Jindal (38), both residents of Sonipat, and were arrested on Wednesday from their respective residences.
“The two suspects are multimillionaires, owning metal and scrap factories. Over the last three years, they have caused huge loss to the government by availing of ITCs fraudulently. These businessmen, in order set-off their tax liability, used to claim ITC through bills in the name of bogus firms, which do not exist and were created only for this scam. The two were the end claimants of the input tax credit and had so far caused a loss of over ₹26 crore to the exchequer,” Avasthy said, adding that police have so far arrested 32 suspects in connection with the case.
Jindal is the owner and director of a Sonepat-registered firm called M/s Brownie Metal and Alloys Pvt Ltd which had taken bills from 20 shell firms and claimed a credit of ₹17 crore, he added.
“Sharma, the owner and director of Sonepat-based M/s Crystal Industries, claimed bills from six shell firms and claimed ITC worth over ₹8.5 crore. Earlier this month, the Noida police had declared a reward of ₹25,000 on their arrest,” said Avasthy.
He further said the two suspects were earlier arrested in July from Sonepat by the GST department over revenue loss.
“Both of these businessmen were arrested by the GST department in July last year when we had shared a list of the 3,000 fake firms registered by the gang. After spending two months in jail in Haryana, they were released on bail. The Noida police have now arrested them on criminal charges for running the scam,” said Avasthy.
The suspects have been booked under Indian Penal Code sections 420 (cheating), 467, 468 and 471 (all related to forgery), 120 B (party to criminal conspiracy), police said.
In a breakthrough in the Goods and Services Tax (GST) fraud case, the Noida Police on Wednesday said it has arrested two Haryana-based “billionaire businessmen” who allegedly masterminded the multi-crore revenue loss to the exchequer.
The accused are in the business of metal scrap and have collectively caused a revenue loss of around ₹ 25 crore to the exchequer, a senior police officer said.
Known as the “GST scam”, the case came to light in June 2023 and pertains to revenue loss to the exchequer through input-tax credit (ITC) being claimed by thousands of bogus companies that were floated using forged documents.
The police investigation has shown the involvement of hundreds of bogus firms and transactions of around ₹ 10,000 crore by those, and more than two dozen people have so far been arrested in the case, according to officials.
Deputy Commissioner of Police (Crime) Shakti Mohan Avasthy said a few months ago, a team from Noida’s Sector 20 police station busted a racket and arrested some suspects who were allegedly behind floating around 2,600 bogus companies.
“In pursuance of that case, the masterminds of the racket who fraudulently claimed ITC from the government and caused revenue loss to the exchequer were arrested on Wednesday. The masterminds are billionaire businessmen and have been identified as Sanjay Jindal and Ajay Sharma,” Avasthy told reporters here.
“Jindal runs a company by the name of AS Brownie Metal and Alloys located in Sonipat district of Haryana. He fraudulently claimed ₹ 16.9 crore worth of ITC. This amount was later frozen by enforcement agencies. Sharma used six companies to cause a revenue loss of ₹ 8.57 crore. This amount was also frozen later by the GST department following a report by the Noida Police,” the officer said.
Avasthy, who has been leading the investigation in the matter since it came to light, said both the accused are “billionaire businessmen” and have “huge businesses” in Sonipat.
Jindal and Sharma were wanted by the Noida Police for long and carried a reward of ₹ 25,000 each on information leading to their arrest, the DCP added.
“Jindal and Sharma are the masterminds of the racket. They were the real beneficiaries of this fraud business of floating bogus companies and claiming ITC on their behalf. So far, we have arrested 32 people in connection with the case and some more linked to it will be held soon,” he said.
Police said an FIR was lodged at the Sector 20 police station under Indian Penal Code sections 420 (cheating), 467, 468, 471 (all related to forgery) and 120B (criminal conspiracy).
Last month, the Noida Police attached assets worth approximately ₹ 12 crore of the gang members involved in the GST “scam”, including immovable properties at multiple locations in Delhi.
The case came to light in June 2023 after thugs applied for the registration of bogus companies by fraudulently using the PAN details of a journalist and got two firms registered –” one in Punjab and one in Maharashtra — while the request for a third such company to be registered in Delhi was rejected by the GST authorities.
UP’s biggest GST evasion caught with the help of AI, Ghaziabad firm had committed fraud of Rs 19.66 crore: The biggest ever GST evasion in the state has been detected with the help of Artificial Intelligence (AI) in Ghaziabad (Ghaziabad GST Evasion). State tax department officials are engaged to detect GST evasion. The Artificial Intelligence (AI) of the department is also helping them in this work. A firm had fraudulently taken input tax credit of Rs 19 crore 66 lakh from the department in a single financial year. After this, when the firm started filing its returns, the AI installed in the system analyzed it. In which it was revealed that whatever ITC claim has been made by the firm is completely fake. Then when the department officials cracked down on the owner of the firm, he deposited Rs 19 crore 66 lakh in the department. In this, one crore rupees was taken in cash and the remaining money was taken from his bank account.
The state tax department scrutinizes the e-way bills issued for the returns filed by traders and firms every month through an AI enabled system. In the same sequence, on the instructions of Joint Commissioner of Corporate Circle Diparatan Singh, investigation of paint selling firms of Indirapuram area was started. Investigation found that a firm has claimed excess ITC of about Rs 20 crore on account of IGST in monthly return GSTR-3B relative to ITC availed on purchases made in this financial year. It was caught with the help of AI. After this, the departmental officers themselves investigated it. When irregularities were found, a notice was issued to the concerned firm and additional ITC was recovered.
How the system works
Officials said that the AI installed in the system keeps an eye on every activity of the traders and the firm. This includes monitoring tax compliance, identifying non-filers, identifying potential tax evasion activities by taxpayers to avoid tax, identifying ineligible Input Tax Credit (ITC) claims, taxpayer profiling. Getting complete information about taxpayers through Dealer 360, risk based analysis of taxpayers, displaying the difference based on declared turnover and e-way bills issued.
There is a red flag in these cases
Officials say that new traders may have downloaded more e-way bills, or have discrepancies in returns, are not depositing tax or are availing undue benefits of ITC. AI starts showing red flags to such traders on the portal. Then the department officials start investigating such traders. After investigation, the process of tax recovery is started by giving notice.
So far, the police have arrested 29 suspects in connection with the case and exposed 2,660 bogus companies during the investigation
The Noida police on Wednesday evening executed an order from the district court to attach immovable assets of two Delhi-based men who were arrested for allegedly perpetrating a GST [goods and services tax] fraud amounting to nearly ₹10,000 crore that had come to fore last year, senior officials said on Thursday.
On June 1 last year, the Noida police busted a gang suspected of orchestrating the multi-crore fraud. According to police, the gang would register thousands of bogus companies under stolen or fake identities and use them to generate e-way bills and obtain input tax credit (ITC) from the government.
So far, the police have arrested 29 suspects in connection with the case and exposed 2,660 bogus companies during the investigation.
“The Noida police had earlier filed an application with the district court to take legal action against those involved in the fraud following which on Monday, the court issued 21 attachment warrants under Section 83 (attachment of property of person absconding) of the Criminal Procedure Code (CrPC) against seven suspects who have been proclaimed as absconding,” said Rajneesh Verma, assistant commissioner of police-1, Noida.
Properties collectively worth over ₹25 crore have been identified and will be attached during legal proceedings, said the ACP.
“Of the seven, the property of two suspects — Arjit Goyal and Rohit Nagpal, both residents of Rohini area in Delhi– that have been are valued at ₹5 crore, was attached on Wednesday. Action against the others will be taken soon,” said the officer.
The fraud was unearthed after a Noida resident and editor of a media firm located in Sector 16 submitted a complaint regarding an identity fraud on his PAN card at the Sector 20 police station on May 10.
An FIR in connection with the case was lodged at the Sector 20 police station last year under Indian Penal Code sections 420 (cheating), 467, 468, 471 (all related to forgery) and 120B (party to criminal conspiracy), the office said.
In Haryana, GST Superintendent and CA have been arrested by the Anti Corruption Bureau (ACB) team for taking bribe of Rs 10.5 lakh. Both of them had demanded a bribe of Rs 12 lakh from the industrialist to suppress the GST penalty.
The team has recovered Rs 7 lakh from CA Pankaj Khurana and Rs 3.5 lakh from the car of Superintendent Premraj Meena posted at the Central GST Panipat office. Both were arrested last evening (9th February) after ACB registered the case.
These are the sections included in the FIR
ACB Inspector Sachin posted in Karnal said that a case has been registered against both of them in Karnal ACB office. In FIR number 6, serious sections of 7, 7A PC Act and 120B, 384 IPC have been imposed against them.
Both the bribe takers were caught like this
Inspector Sachin told that the industrialist of Panipat has given him a complaint. It was stated in the complaint that the GST Superintendent and CA were demanding bribe from him to suppress the GST penalty. For this he is constantly harassing her. The team was formed after the complaint.
A plan was made to catch them. The complainant was given notes laced with chemicals. Meanwhile, CA Pankaj Khurana came on February 9 to collect Rs 7 lakh as bribe. During this time the team caught Pankaj with Rs 7 lakh.
Money found in superintendent’s car
Superintendent Prem Raj Meena was also on the radar of ACB. The complainant had given Rs 3.5 lakh to Prem Raj. In which he had given Rs 3 lakh once and Rs 50 thousand the second time. ACB team searched Prem Raj’s car. From inside which bribe money was recovered. Both will be presented in the court.
DGGI detects 1,700 fraudulent ITC cases involving Rs. 18,000 crore with 98 arrests in Financial Year 2023-24 (up to December 2023)
In the current Financial Year 2023-24 (up to December 2023), 1,700 fake ITC cases involving Rs. 18,000 crore have been detected and 98 fraudsters/masterminds have been apprehended by the Directorate General of GST Intelligence (DGGI).
In the current financial year, the Directorate General of GST Intelligence (DGGI) has laid special emphasis to identify and apprehend the masterminds of fake Input Tax Credit (ITC) and disrupting syndicates, operating across the country. DGGI has unraveled cases using data analysis aided by advanced technical tools which led to the arrest of tax evaders. These tax syndicates often use gullible persons and enticed them with job / commission / bank loan etc. to extract their Know Your Customers (KYC) documents which were then used for creation of fake / shell firms / companies without their knowledge and consent.
In some cases, KYC method was used with the knowledge of the concerned person by paying them small pecuniary benefits.
The following cases were detected by DGGI during the period:
Jhunjhunu State GST team has caught two fake firms while taking action in Malsisar and Bas Budana of the district. Both the firms were not operating at their respective addresses. Someone else’s residential house was found built at the address of a firm. The landlord was found working in the field.
On inquiry about the owner of the firm, he was told to have no information. Both the firms were giving the benefit of fake input tax credit to the other firm by showing fake turnover of Rs 4.30 crore on paper.
Assistant Commissioner Sunil Janu said that in checking the records of the firms available on the GST portal, iron scrap firm M/s operating in Malsisar was found. S. S. International and contracting firm operating in village-Bas Budana. Yogendra Singh was suspected of being fake.
Fake address was running for two years
After this, on the instructions of Additional Commissioner of Bikaner Division, Nihalchand Bishnoi, the first team reached Malsisar for investigation and search proceedings against these two firms. The firm was not found to be operating at the address declared in the firm registration. No information was found about the firm and the owner in questioning the people of the neighborhood. No information was found about the firm owner Sukhwinder s/o Balveer. Firm owner Sukhwinder is a resident of Tibbi Amloh, Punjab. The firm was operating on paper at this address for the last two years.
On detailed scrutiny of the records, it was found that by showing bogus turnover of Rs 395 lakh in the papers, the benefit of fake input tax credit of about Rs 71 lakh has been given to the traders of Rajasthan and other states.
In whose name the company was found working
After this team contracting firm M/s. Bas reached Budana village to investigate Yogendra Singh. The residential house of Bhanwar Singh s/o Amar Singh resident Bas Budana was found at the address given by the firm in the registration. Bhanwar Singh was found working in the field. During interrogation of Bhanwar Singh, No information was found about any firm named Yogendra Singh or firm owner Yogendra Singh s/o Jaipal Singh. Firm owner Yogendra Singh is a resident of village Nagla Dhanu in Ita district of Uttar Pradesh. Bhanwar Singh also told that neither he ever gave the electricity bill of his house to anyone nor did he ever get the rent deed of his house done.
He doesn’t even know that a fake firm is running on paper at his home address. 6.25 lakh by this firm by showing bogus turnover of Rs. 35 lakh in the papers. The benefit of bogus input tax credit of Rs.15,000 was found to be passed on to other firms.
Registration of both firms suspended
In the presence of Bhanwar Singh and witnesses, the GST team made an opportunity and after detailed investigation, considering the above two firms to be fake, Assistant Commissioner Sunil Janu suspended the registration of both the firms and prepared a detailed report and sent it to the higher authorities. .
Assistant Commissioner Sunil Janu said that any firm registered in the state of Rajasthan or in other states, which has been given the benefit of fake input tax credit, should write a letter to the concerned jurisdictional GST authorities for action to block and reverse the input tax credit. are given. During this, apart from Assistant Commissioner Sunil Janu, Assistant Commissioner Kusum Chahar, State Tax Officer Shakti Singh, Tax Assistant Mukesh Meena and Suresh Saini were involved in the proceedings.
Widening its probe in the bogus invoicing case against insurance intermediaries and aggregators, the Goods and Services Tax (GST) authorities issued summons to several of them in the past two weeks seeking extensive information.
The information sought includes their agreement and contract with insurance companies, total input tax credit passed to them since 2018-19, along with supporting documents proving rendering of services. The summons were issued in connection with the Directorate General of GST intelligence (DGGI) probe launched in 2022 against at least 16 insurance companies for allegedly availing input tax credit in a fraudulent manner.
These intermediaries allegedly generated bogus invoices in the guise of marketing and sales in collusion with insurance companies. “The summons have been issued under section 70 of the Central GST Act to some of the intermediaries,” a source privy to the matter told Business Standard.
“Some of them provided partial information, but in many cases they failed to prove the services rendered against which invoices were raised,” the source added. The GST authorities recently launched prosecution proceedings against a listed e-intermediary. “The matter is still ongoing and the company concerned sought some time to furnish details,” the source said.
Meanwhile, the income tax department has also started questioning officials of some of these intermediaries seeking information on the money they received as “commission” from the insurance companies and whether it was disclosed fully in their tax filing.
“Chief financial officers of some of these firms were questioned last week. They have been asked to provide a slew of documents related to their tax filing, particularly the revenue these intermediaries received from top insurers of the country,” said an official.
The I-T department is learnt to be examining their tax returns for the past three to five years, they said.
At least 120 insurance intermediaries and aggregators from across the country are under scrutiny, mainly from Mumbai, Gurugram and Bengaluru.
Sources said that the I-T team would soon reach out to insurance companies after collating all data from the intermediaries. The department suspects industry-wide irregularities in paying commission to their brokerages and intermediaries.
Under the GST regime, issuing an invoice without supply attracts a jail term up to five years if the amount involved is Rs 5 crore or above. The offence is not bailable. The DGGI probe allegedly found that the insurance firms were paying commissions as high as 70 per cent to intermediaries like these and even offline agents.
Notably, the limit is 15-20 per cent depending on the products prescribed by the Insurance Regulatory and Development Authority of India (Irdai).
The GST team is tracking the ineligible input tax credit, while the tax department is looking at possible tax evasion while issuing fake invoices, the sources cited above said.
The practice is systematically planned and executed in collusion with insurance companies, they underlined. The investigators are examining invoices raised by both online insurance marketplaces and offline brokerages. Last year, the DGGI detected tax evasion of Rs 824 crore by 15 life and non-life insurance companies and others as part of its probe.
WIDENING THE PROBE
state GST department has unearthed a scam with a new modus operandi where 1,500 Aadhaar cards were illegally used in the past eight months to generate bogus GST registration numbers.
To keep a check on bogus billing, the department carried out spot verification of suspected firms, including those in Surat, Bhavnagar, Ahmedabad, Anand and Rajkot, on February 7. During operations conducted over 75 firms in Surat, it was found that duplicate documents such as Aadhaar and PAN cards were created using an android mobile application.
In Surat, an Aadhaar card holder with residential address in Palitana had no knowledge about the GST registration and PAN number obtained in their name by amending the mobile number linked to Aadhaar.
“Many residents said that in the name of government assistance, they were taken to Aadhaar centres at Palitana and their thumb impressions were taken,” stated the GST department, which conducted search operations in Palitana and seized mobiles, laptops and other digital devices from Aadhaar centres.
“On checking these seized devices, it was found that in the past eight months, more than 1,500 Aadhaar cards have had their mobile numbers amended,” the department stated adding that 470 GST registrations obtained through this illegal process were found. Of these, 118 registrations were from Gujarat, while the remaining were from other states.
“Thus a new kind of modus operandi has come to the attention of the department to obtain bogus GST numbers,” it added.
Further verification of 470 registrations obtained from modified mobile numbers in Aadhaar card revealed that more than 2,700 GST registrations were obtained across India. “Many of these GST registrations are likely to be bogus. In-depth verification is in progress,” the statement added. The department has filed an FIR in this regard at Palitana, officials said.
the verification of 75 Surat firms revealed that 61 were involved in bogus billing activity. in Ahmedabad, of the 24 firms verified, 12 were found to be involved in the illegal operation.
Taxation department, Punjab, on Monday arrested four persons from Jalandhar for alleged ₹48-crore goods and services tax (GST) fraud.
creating bogus ITCs, these persons were passing on the same bogus ITC to other than end taxpayers, who adjusted their tax payment liabilities with this bogus ITC rather than paying the same on their own.
The suspects were allegedly running fake firms related to iron scrap, and had obtained GST registrations only to claim input tax credit (ITC) fraudulently by issuing only invoices without the supply of actual goods. An official spokesperson of the taxation department said that Pankaj Kumar, Ravinder Singh, Gurvinder Singh and Amritpal Singh were arrested. They were produced before the magistrate and sent to judicial custody.
The spokesperson said these persons were allegedly only showing circular trading of iron and plastic scrap and in lieu of that they were issuing fake invoices and generating fake e-way bills on scooters, motorcycles, cars, vans, tractors and fake vehicles having no records. He allegedly said that by creating bogus ITCs, these persons were passing on the same bogus ITC to other than end taxpayers, who adjusted their tax payment liabilities with this bogus ITC rather than paying the same on their own.
Official twitter handle of CBIC has tweeted that “Identifying taxpayers who are fraudulently availing Input Tax Credit and penalising them under CGST Act is the priority of Government.”
Reportedly, Input Tax Credit (ITC) frauds are increasing day by day in the country.
In MP, the commercial tax department took a big action and caught a big scam. Action has been taken against bogus institutions passing on ITC to other firms by issuing fake bills. The department has caught the supply chain of bogus firms. Bogus turnover of crores of rupees was being done through these firms. Most of the firms did not exist. Raids were conducted at the locations of many firms including Indore, Neemuch.
In this action, a GST fraud of Rs 315 crore was caught. During data analysis, the department found that some firms were doing huge turnover in a short span of time by taking new registrations. During artificial intelligence, geo-tagging and preliminary investigation of business sites, this error was caught. After that the teams of the department raided the locations of many firms simultaneously in Neemuch including Indore. Many firms were found bogus during the raid. That is, there are not any firms, only their names are recorded on the papers. These bogus companies gave the benefit of bogus ITC of Rs 15 crore to other firms by showing the supply of 315 crores of DOC in the return.
Forged signature of Deceased Person
Bogus firms include Shreenath Soya Exim Corporate, Shree Vaibhav Lakshmi Industries, Agarwal Organic – Agarwal Overseas, JS Bhatia Enterprises. When the team reached the given address of these firms, no commercial activities were found there. That is, there is no firm and all the transactions were being done in its name. Of these, M/s Srinath Soya Exim Corporate Firm was in the name of an auto driver Sachin Pateria. Fake rent deed was filed with the application for registration. The owner of that house had died many years ago. Similarly Ajay Parmar, the proprietor of M/s Shri Vaibhav Laxmi Industries, was not found at the place of business. Fake rent deed was also imposed for the registration of the firm. The owner of the business place which was recorded in the rental deed said that I have not given it on rent to any firm. Similarly, Agarwal Organic and Agarwal Overseas were found to be non-existent. The department is taking action against these bogus firms.
Vide internal circular no. 03A of 2022, dated 25.02.2022, the Maharashtra GST department has issued guidelines on assessment of non genuine/ non existent taxpayers under GST.
The Circular can be read as under:
Synopsis
Assessment of return non-filers w/s 62 is done as a measure to ensure filing of return. However, the taxpayers are detected as non-existent / non-genuine and the registrations are cancelled consequently, the issue of addressing the liability arising out of the UAO has cropped up which is dealt with in this circular.
1.) Background:
Best judgment non-filer assessment orders u/s 62 in case of return non-filers (hereinafter referred to as ‘UAO’), is very widely used in follow up of return defaulters who do not file return even after service of notice under section 46 (GSTR-3A notice). The guidelines for prioritization in passing of UAOs and subsequent action thereupon have been issued vide Internal Circular referred above at Sr. No. 01. However, certain issues have been cropped up in some of UAOs due to detection of non-genuine / non-existent taxpayers subsequent to such UAO. It has been noticed that demands of tax are raised under UAOs against such non-existent / non-genuine entities under the presumption of supplies made by them. However, these entities are indulged in bill trading or fake bill issuing without any underlying supply of goods or services and they are persons of no means. The demand raised under these UAOs is based on presumption of supply, which doesn’t exist in the cases of non-existent / non-genuine entity. Hence enforcing such demand from such non-existent / non-genuine entities would amounts to imposition of GST on transaction without supply of goods or services, which don’t augur to the test of law. The actual benefit of fake invoices issued without supply of goods or services are availed by actual beneficiary recipients of such non-existent / non-genuine entities. The conditions provided in section 16 (2) of the GST Act, which are pre-requisite for availing ITC, are not satisfied in case of ITC availed on the strength of fake invoices / bills. Therefore, the recovery actions to this effect needs to be enforced upon actual beneficiary. These presumptive demands in UAOs would un-necessarily give an opportunity to actual beneficiary recipients of such fake invoices to take shelter against recovery from them, which makes this issue of dues on account of non- an issue prejudicial to the interest of revenue.
