GST Fraud of Rs.54 crore uncovered in Delhi; ACB arrested Tax Officer and Lawyers

The Delhi Police’s Anti-Corruption Branch has busted a Goods and Services Tax (GST) refund fraud, arresting seven people, including a GST officer, three lawyers, one owner of a fake company, and two transporters.

The investigation discovered illegal GST refunds of roughly Rs.54 crore and fake invoices worth Rs.718 crore provided to fake entities, according to ACB chief Madhur Verma, Joint Commissioner of Police, on Monday.

The accused include GST official Babita Sharma, advocates Raj Singh Saini, Narendra Kumar Saini, and Mukesh Saini, Manoj Goyal, the owner of fake firms, and transporters Surjeet Singh and Lalit Kumar.

According to the police, the GST officer was involved with 96 fake companies and issued 404 refunds totalling Rs.35.51 crores in 2020-21. In the previous year, they were only refunded Rs.7 lakh. The police stated that these refunds were approved within two or three days of filing by fraudulent firms.

The police also stated that the transporters were used to create fake e-way bills and receipts for use in refund applications.

The GST refunds were routed through numerous accounts, with 1,000 accounts identified to be related to the 127 accounts of fake companies, their employees, and family members of the accused persons verified by the ATS. The money trail revealed that in the end, the lawyers were the primary beneficiaries of the refunds.

The police revealed that 23 of the 96 bogus businesses were run by the same group of persons. Between January 2, 2020, and September 23, 2021, they were in charge of creating counterfeit invoices worth Rs.176.67 crore and illegally claiming a GST refund of Rs.5.81 crore. According to the authorities, seven of these 23 organizations posed as entities involved in the export of medications, medical equipment, and devices, using falsified bills totalling Rs.30 crore.

When Sharma was shifted to Ward No. 22 from Ward No. 6 on July 26, 2021, the Vigilance Bureau and GST department discovered the fraud, and 53 companies later registered for the same migration.

GST inspectors investigated the physical addresses of these firms on September 23, 2021, and discovered that they were all non-existent. Following a preliminary investigation, a First Information Report (FIR) was filed on April 28, 2023, at ACB, Delhi, citing Section 7 (public servant being bribed) of the Prevention of Corruption Act and Indian Penal Code sections dealing with cheating, forgery, and criminal conspiracy.