3 Agra based Taxpayers held for availing Fraudulent GST Refund of 15.27 Cr

In an intriguing case reported by the Directorate General of GST Intelligence, Lucknow Zonal Unit, officers discovered that three Agra-based taxpayers were claiming fraudulent Input Tax Credit (ITC) on raw materials used to manufacture ‘Handpumps’.

The fake ITC on raw materials (@18%) was then used to generate fake invoices for handpumps (@ 5%) to non-existent firms with no actual manufacture or delivery.

Using this method, taxpayers were collecting bogus refunds through an “inverted duty structure,” resulting in evasion of Rs. 15.27 crore thus far.

The mastermind behind the whole operation, who has been placed in judicial detention, accepted the fraud and voluntarily deposited Rs. 5.21 crore.

Earlier this month, DGGI caught 98 fraudsters/ masterminds and detected 1,700 fake ITC claims totalling Rs.18,000 crore during the current financial year 2023-24 (till December 2023).