GST officials detect Rs 1,125 crore fraud by fake firms in Gurugram

GST officials have busted a whopping Rs 1,124.66 crore racket in Gurugram involving fraudulent claims of Input Tax Credit (ITC) by 539 fake entities.

Acting on a tip-off, The Directorate General of GST Intelligence (DGGI) carried out a forensic examination which detected a large number of forged Aadhar cards, PAN cards and GST registrations of fake firms. The operation was conducted by DCGI’s Gurugram zonal unit on the basis of intelligence inputs and one key operative has been arrested so far, according to information provided by the finance ministry.

Initial investigations indicate that the fraudulent ITC credit has eventually travelled to the highly evasion prone iron and steel sector. The detection of the fraud has helped to prevent Rs. 814.61 crore from flowing to these fake entities through the fraudulent ITC claims.

Officials of the DGGI Gurugram Zonal Unit have also detected a modus operandi prevalent in the trade of supply of mobile phones purchased from the grey market without any underlying invoice or from online e-commerce platforms in the name of various unregistered individuals. Some unscrupulous persons hoard these mobile phones and supply them in bulk to various traders. However, as the goods are bereft of ITC that can be utilised further, these persons create a network of fake firms to generate fraudulent ITC and then use this fraudulent ITC for further discharging their GST liability.

So far, a network of 19 fake entities has been unearthed during an investigation and a detection of GST evasion of Rs. 97.44 crore has been made, resulting in recovery of Rs. 18.35 crore. In one such recent detection involving fraudulently availed ITC of Rs. 9.58 crore, a key person has been arrested, according to the official statement.