DGGI Busts Rs 1,825 Crore GST Refund Scam, Mastermind Kapil Chugh Arrested at IGI Airport

The Directorate General of GST Intelligence (DGGI), Ahmedabad Zonal Unit, in a major action on 19 April 2026, arrested Kapil Chugh, the main accused in the Rs 1825 crore GST refund scam, from Indira Gandhi International (IGI) Airport, Delhi. He was returning from Dubai. Kapil Chugh was already wanted in several economic crimes and had never joined the investigation despite a total of 22 summons issued by the investigating agency.

During the investigation, it came to light that Kapil Chugh, along with his associate Vipin Sharma, had created a well-planned network to obtain fake Input Tax Credit (ITC) and withdraw it as a refund. Multiple fake companies were used in this network, which was created on the basis of borrowed KYC documents. These firms had no actual offices, no employees, or trading activity. The people in whose name these firms were formed existed in name only and were paid monthly cash.

This entire network was being operated in a centralized manner, with everything from GST registration to invoice generation, banking operations, return filing and refund claims under the control of the key accused. High-value input tax credits were generated by generating fake purchase bills without the actual supply of goods, especially in the name of tobacco products. The invoices were moved through several middle companies, so it looked like real buying and selling was happening, even though it wasn’t.

These ITCs were then gathered in select companies that were shown as exporters, especially in cases related to Kandla Special Economic Zone (KASEZ). Large-scale GST refund claims were made without payment of tax under a Letter of Undertaking (LUT) by showing “zero-rated supplies” on paper. The investigation also found that most of the exports were either completely fraudulent or their value was grossly inflated.

Physically speaking, there were no signs of actual trade. Fake e-way bills, suspicious vehicle numbers and duplicate logistics records were used to transport the goods. The financial analysis revealed that despite large transactions, the actual payments or business expenses were almost negligible, and most of the funds were moved between the concerned institutions and were withdrawn in cash.

Additionally, Kapil Chugh is also accused of defrauding Yes Bank of approximately Rs 11 crore by inflating the turnover of his export business. A charge sheet has also been filed against him by the CBI in another case on the charges of availing credit facilities on the basis of fake documents. Apart from this, SEBI has also taken action against his associate, Vipin Sharma, in which a case of increasing the valuation of the company by increasing the turnover through fake GST billing has come to light.

Overall, this case is of a widespread and organized economic crime, causing huge loss to government revenue through shell companies, fake billing, false exports and complex transaction structure. Presently, the investigating agencies are investigating this entire network in depth and other connected persons and transactions are being identified.