GST Evasion: DGGI busted Fake GST Bill Racket worth Rs.1,000 crore

The Directorate General of GST Intelligence (DGGI) arrested a gang of  ‘fake GST bill operators’ who used to run a racket to assist enterprises, particularly those in the metal and scrap industries, in obtaining input tax credit (ITC).

DGGI investigation indicated that around 160 firms were formed using documents obtained fraudulently from people by offering to assist them obtain government Covid relief or employment. Following the acquisition of their documents, bogus corporations, bank accounts, and invoices were constructed to assist the firms in obtaining the tax credit.

While the transactions under investigation total more than Rs.1,000 crore, the DGGI suspects a revenue loss to the government of Rs.206 crore.

The DGGI Mumbai unit has captured an alleged mastermind in the case. More arrests are expected in the investigation, according to sources.

So far, the investigation has revealed that these businesses are engaging in a large-scale nexus of phoney billing/fake invoicing, in which only invoices have been generated and no real supply of products has occurred.

“While the probe is from FY 2018, it has discovered that the gang was able to entice more people to disclose their KYCs during Covid by offering them employment or government schemes.” Official said.

The Officials further stated, “Many GSTINs have already been cancelled by concerned jurisdictional authorities; however, the proprietors and directors listed against these enterprises on the GST site have yet to be found, as all of the firms are managed, handled, and maintained by a few individuals.”