DGGI Gurugram arrest a CA & 2 other person in fraud of claiming fake ITC of 121 crore

The Gurugram Zonal Unit (GZU) of the Directorate General of GST Intelligence (DGGI) in Haryana has arrested three people, including a CA, on charges of creating and operating multiple fictitious businesses using forged documents and passing large amounts of fake input tax credit through the issuance of invoices without any actual receipt or supply of goods or services.

According to the inquiry thus far, one of the accused people has set up at least 13 businesses and has been involved in obtaining and passing on a total of Rs 121 crore in illegal ITC.

It was also discovered that the person who set up the fake/dummy firms collaborated with a commission agent, who sold the goodless bills to established firms for commission, both directly and through other brokers. The commission agent has been detained as well.

Furthermore, it has been discovered that established firms (end-users) would make transfers to these fake firms, from which the funds would be transferred to a private limited company account, from which the CA in question would withdraw and return the funds in cash after deducting his company’s commission as well as his own commission. The daily cash transactions were in the range of Rs 30-40 lakh.

Based on verifications, evidence, and statements recorded, it appears that these three individuals, namely the creator of the fake firms, the commission agent, and the CA, were working together to orchestrate this racket of creating fake firms using forged documents and passing on fraudulent ITC worth Rs 121 crore (so far). As a result, on September 13, 2021, they were detained under Section 69 read with Section 132 of the CGST Act, 2017 and brought before the CMM in Delhi, who imposed 14 days of judicial custody.

In this case, more investigation is being carried out.