CGST Delhi busts nexus of more than 30 Fake Firms; Key Culprit arrested against Fake Registrations

The CGST Delhi West Commissionerate, under the CGST Delhi Zone, discovered multiple entities registered on the same address during an investigation as part of the Special Drive against fake registrations, wherein the said address was found existent during verification but the owner of the said premises denied any knowledge of the existence of any firms. A supply chain analysis found that no products were moved from the specified address.

As a result, searches were conducted at numerous sites in Delhi uncovered using data analytics, and it was determined that a person named Shiva had been acquiring KYC credentials from individuals under the guise of getting loans sanctioned for them and then selling the businesses. Further investigation found that Shiva had constructed over 30 bogus companies and sold them for cash at a profit. He further revealed that in order to avoid physical verification, he obtained these GST registrations via AADHAR authentication.

These several organisations were discovered to have taken/passed on ineligible ITC totaling more than 50 crore. As a result, Shiva was detained for violating Section 132 of the CGST Act, 2017. Today, he was remanded to judicial detention. More research is being conducted.