DGGI Officials bust syndicate operating in 14 States through 569 Fake Firms fraudulently claiming ITC of Rs.1,047 crore

The Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit, has uncovered a significant criminal syndicate located in Delhi as part of its ongoing drive against syndicates running and managing fraudulent businesses.

This syndicate was operating 569 fake firms and through them created huge fraudulent ITC of Rs 1,047 crore. The mastermind, Shri Rishabh Jain, 30, of Delhi, had hired ten people to run these bogus firms. Following thorough reconnaissance and data analytics, authorities from DGGI, Jaipur were able to track down and apprehend this mastermind in Delhi.

The syndicate’s mode of operation implies that it has a tight relationship with multiple brokers to acquire businesses, bank accounts, SIM cards, handle their RTGS/cash transfers, and mediate between them and recipient firms. Brokers/agents specialise in registering businesses on GSTN using the IDs of the poor, needy, and vulnerable, and then selling these registered enterprises to syndicates, who then issue fake invoices through them.

This syndicate has issued invoices having taxable turnover of Rs. 6,022 crore involving ITC of Rs. 1,047 crore through these 569 fake firms to more than 2,000 beneficiary firms. Majority of the fake firms are located in Delhi with presence in 13 other states of Rajasthan, Uttar Pradesh, Punjab, Bihar, Jharkhand, Gujarat, Maharashtra, Haryana, West Bengal, Karnataka, Goa, Assam and Uttarakhand. So far, 73 bank accounts used by syndicate and brokers have been attached.

Shri Rishabh Jain was arrested on June 25, 2023, and brought before the Economic Offence Court in Jaipur, where he was held in judicial prison until July 7, 2023.

DGGI, Jaipur Zonal Unit has been in the forefront of detecting fake ITC cases in Rajasthan, as 142 cases involving false ITC of Rs. 1,327 crore were registered during the last financial year (2022-23), and 9 people arrested. In the current financial year (2023-24), 5 fraudulent ITC cases totalling Rs. 1,531 crore have been booked in less than 3 months, with the arrest of 5 masterminds.

This unit is dedicated to take all preventive steps to find more such syndicates and their masterminds, who are jeopardising administration of GST by issuing fake bills. This unit had succeeded in cracking 2 big syndicates within last seven days. Last week also, two masterminds were arrested from Jaipur on 19.06.2023 for running a fake ITC syndicate of Rs. 320 crore. Follow up action is being taken for realising government revenue.