Biggest ever GST Fake Invoices Racket, used PAN card data of 635000 people; 5 CA suspected

The Gautam Budh Nagar police have busted an eight-person gang who were unscrupulously misusing permanent account number (PAN) cards of 635,000 people for over five years and creating 2,660 shell companies to evade Goods and Services Tax (GST) worth multiple crores, as per Harish Chander, Deputy Commissioner of Police (Noida).

While officials have yet to determine the overall amount of tax evasion, an official from the state GST department who was present at a news conference conducted by the Gautam Budh Nagar police on Thursday stated that it may be more than 10,000 crore.

“We have verified and analysed all of the evidence and documents discovered by the police during their investigation into the scam. According to our estimations, the suspects cheated the GST department of more than 10,000 crore,” said the official, who spoke on condition of anonymity because he was not authorised to speak to the media.

According to the official, the suspects secured a refund of input credit tax from the government by utilising phoney organisations, resulting in a multi-crore loss to the public purse.

“The complainant discovered that his PAN card number had been used to register two bogus businesses, one in Punjab and the other in Maharashtra. Following that, a first information report was filed under provisions of the Indian Penal Code dealing with forgery and cheating, and an inquiry was commenced,” DCP Chander explained.

Following an investigation, the authorities were led to a gang that had been operating for five years and possessed the permanent account number card data of almost 635,000 people.

“The gang has been active for the last five years, and at least 635,000 people’s PAN card details have been recovered from them. These PAN card credentials were utilised by the accused to set up phoney firms and register them with GST numbers. We discovered 2,660 such bogus companies were set up using fake permanent account number card information. These fraudulent firms were subsequently utilised to create e-way bills (GST related challans for shipping consignments) worth more than Rs.2- 3 crore per month on each,” said Laxmi Singh, commissioner of police in Gautam Budh Nagar.

“These companies were registered in various cities across the country under different names,” Singh explained. The police commissioner stated that the GST department and other authorities have been contacted to probe the situation.

According to police personnel involved in the case, seven suspects who bought the businesses from the detained individuals have been identified and are being sought.

“Five of the suspects are chartered accountants. We have spoken with GST authorities, who are concerned that some businesspeople may have acquired these phoney firms in order to receive GST input tax credit from the government and cheat tax,” said Rajneesh Verma, assistant commissioner of police-1, Noida.

Yasin Sheikh (38) of Mumbai, Akash Saini (21) of Sahibabad, Atul Sengar (23) of Hathras, Avni (25) of Noida, Deepak Murjani (48) his wife Vinita (45) Vishal (20) and Rajeev (38) are the suspects. They were detained at their workplace in Delhi’s Madhu Vihar.

As per Verma, the suspects first constructed bogus organisations by fraudulently acquiring personal data from a service provider, such as names, fathers’ names, dates of birth, and personal account numbers.

“The suspects used this data to fill out bogus rent agreement and electricity bill forms found online, or to edit existing bills with the data,” he said, adding, “then they looked for unemployed people living in slums or temporary settlements and paid them between Rs.1,000 and Rs.1,500 for their Aadhaar cards. Finally, the suspects altered their phone numbers on their identification cards.”

Detectives acquainted with the case said, the suspects used these documents to construct a shell business and submitted GST returns for these shell corporations. The suspects then sold these shell companies for Rs.80,000- Rs.90,000 in cash, said investigators.

“After that, those who bought the bogus firms used to make attractive offers of GST input credit refund and low-cost conversion of black money to white money to their businessmen clients all over the country,” Verma stated.

The suspects, according to the ACP, used to present bogus firms’ GST tax to convert their customers’ illegal money.

“The suspects used to use this method to convert black money into white money. At the same time, they were recuperating millions of rupees in government input credit in various methods. The gang’s chartered accountants also sold their clients these companies Goods and Services Tax invoices. As a consequence, using only one Goods and Services Tax number, the suspects created fraudulent bills of Rs.2-3 crore in a month,” claimed the ACP.

“As a result, the government has been defrauded in Goods and Services Tax fraud and tax evasion in the same manner by this gang,” DCP Chander continued.

On Thursday, the suspects were taken into judicial custody.