ACB made 7 more Arrest in Rs.54 Crore GST Refund Scam

The Anti-Corruption Branch (ACB) arrested three major conspirators and four proprietors of fake firms who are suspected of being involved in a Rs.54 crore GST refund fraud.

According to an ongoing investigation, the investigating agency has discovered fake invoices totalling around Rs.718 crore. Previously, the ACB detained seven people, including a GST official from the Delhi government and three advocates who were all involved in the case.

ACB chief Madhur Verma shared facts of the case, saying it came to light after the Vigilance Department discovered a few irregularities in the operations of ex-GST official Babita Sharma.

Sharma worked at Ward No. 6 until July 2021. Following her move to Ward No. 22 in July 2021, 53 firms asked for migration from Ward No. 6 to Ward No. 22, and the officer authorized the requests in a relatively short period of time.

Suspecting foul activity, the Vigilance-GST Department dispatched special teams of GST inspectors in September 2021 to physically verify these enterprises at their locations. “All these firms were found to be non-existent and non-functional during verification,” according to the Joint Control Panel.

As a result, Additional Commissioner (Trade & Taxes) Vivek Aggarwal ordered a preliminary inquiry into the incident, which was then forwarded to the ACB for a thorough investigation and uncovering the entire fraud.

The anti-corruption organization filed an FIR under many sections of the Prevention of Corruption Act and began investigating the case.

During the investigation, the ACB discovered that the officer allowed fake GST refunds without verifying the Input Tax Credit (ITC), a critical tool in identifying fake refunds, resulting in a direct loss to the government exchequer.

“Input tax credit has been taken on fraudulent invoices totalling about Rs.718 crore. This suggests that the fake firms made a bogus purchase of this amount. It also implies that the operation of the business has been shown only on documents,” the ACB chief stated.

He stated that around 1,000 bank accounts were discovered during the inspection of 127 bank accounts that were directly tied to fraudulent organizations, their family members, and employees. At the conclusion of the money trail, it was discovered that the accused advocates had received bogus refunds.

The most recent arrests include three conspirators (Akram Ali, Vikesh Kumar Bansal, and Ankur Saluja) and four proprietors (Hanzala, Imran, Intzar, and Pramod Kumar).

Recently, the Directorate General of Goods and Services Tax Intelligence (DGGI) began a massive investigation into a significant GST evasion scam, uncovering over 200 fake entities engaging in fraudulent transactions across the country.

Based on DGGI intelligence, the Ahmedabad Crime Branch carried out simultaneous searches in 14 locations, including Ahmedabad, Junagadh, Surat, Kheda, and Bhavnagar. According to sources, the probe covered 33 locations across the country, with a concentration on fake ITC claims worth crores of rupees. Several significant builders and operators have already been identified as part of the investigation.