1K Crore ITC Fraud Syndicate Busted by GST Officials

Tax officials under the Goods and Services tTax (GST) have caught a syndicate that fraudulently claimed an Input Tax Credit worth more than Rs 1,000 crore through a network of 232 fake entities.

The anti-evasion branch of the Central Goods and Services Tax (CGST) Commissionerate, Meerut, launched the inquiry in October 2023 after detecting that a big gang was fraudulently claiming Input Tax Credit (ITC) through bogus billing.

“The investigation so far has found that a total of 232 fake organizations, with 91 firms registered on a single mobile number, are registered at various locations across the country and have passed an inadmissible ITC of around Rs. 1,048 crores. The total amount of items shown to be supplied by these enterprises is about Rs. 5,842 crore,” the finance ministry said in a statement.

According to the report, many ‘Full Fledged Money Changer Companies’ (FFMCs) were employed to park or route monies produced by fraudulently passed on ITC.

These firms were run by mastermind Praveen Kumar, who filed GST returns for all of the bogus firms. Aside from the common mobile number used to form and manage 91 organizations, 10 more mobile phones and three laptops were seized from Parveen Kumar’s possession.

The officials have also attached five bank accounts where the syndicate deposited the cash.