GST ITC Racket: DGGI investigation into ITC rackets involving 461 Fake Companies on Fake ITC claim of Rs.863 Cr

The Directorate General of GST Intelligence (DGGI) investigated Input Tax Claim rackets involving 461 fictitious entities on fake ITC claims. The DGGI Gurugram Zonal unit has discovered an ITC fraud of Rs.863 crores. So far, two major operators have been apprehended in this case.

According to the information, the scam of passing on fake ITC through bogus shell corporations was discovered when a search was conducted based on intelligence at a covert office used for this purpose.

Furthermore, the DGGI reported that numerous falsified, morphed, or fraudulent soft copies of documents, such as rent agreements, power bills, aadhar cards, driver’s licences, PAN cards, and so on, had been discovered on laptops recovered from this hidden office and used to set up and run their fictitious businesses.

The forensic examination of the stolen computers and other devices resulted in the revelation of an ITC fraud totalling Rs. 863 crore involving bogus 461 companies and the arrest of two main operators. According to preliminary investigations, the fraudulent ITC credit ultimately made its way to the industries most prone to tax evasion, metal and steel.

The DGGI has issued show cause notices to several insurance middlemen and aggregators throughout the nation for generating forged invoices in order to claim ITC. The DGGI launched its investigation into tax evasion in 2022, based on invoices acquired from 2018 to March 2022, and the authorities detected evasion of about 2,250 crore rupees.

In addition, the DGGI of Surat has detained a suspect in the bogus ITC claims. The inquiry uncovered a network of more than 05 fake/bogus/non-existent entities in Surat, Gujarat, that were reportedly involved in the creation and distribution of false ITC.