Fake Firms and E-way Bills to commit Rs.10000 crore GST Fraud

Police arrested a group suspected of orchestrating a Rs.10,000 cr GST scam by creating more than 2,000 companies using stolen or fictitious identities.

Rs.10000 crore GST Fraud

Reetu | Jun 3, 2023 |

Fake Firms and E-way Bills to commit Rs.10000 crore GST Fraud

Fake Firms and E-way Bills to commit Rs.10000 crore GST Fraud

Police arrested a group suspected of orchestrating a Rs.10,000 crore GST scam by creating more than 2,000 companies using stolen or fictitious identities and then using these organisations to increase e-way bills and claim input tax credit (ITC) from the government.

The operation, authorities revealed on Thursday, had been going on for five years, and the gang had set up roughly 2,600 fraudulent businesses. It is suspected of stealing the PAN card information of 6.3 lakh people.

On Thursday, eight individuals were apprehended in Delhi’s Madhu Vihar and taken into jail. Four of them live in Delhi: Rajeev (38), Vishal (20), Deepak Murjani (48), and his wife Vinita (45). Others are Avni (25) of Noida, Akash Saini (21) of Sahibabad, Atul Sengar (23) of Hathras (UP), and Yasin Sheikh (38) of Mumbai.

E-way bills are GST documentation that must be carried whenever goods or services are transported. These enable the government to trace the movement of commodities and services.

Fake ITC, like a fake currency note, allows a company to avoid actual tax liability, affecting the government’s revenue collection. Fake e-way bills also make the company appear genuine,” stated a state GST department employee.

On May 10, the editor of an online news portal filed a complaint at the Sector 20 police station, stating that his PAN card data had been used to establish two firms, one in Ludhiana (Punjab) and the other in Solapur (Maharashtra).

“An FIR for forgery and cheating was filed. We have launched an investigation,” Noida police commissioner Laxmi Singh said.

“For the past five years, the gang has been active. Police recovered information on 2,660 bogus companies that were used to generate e-way bills worth Rs.2-3 crore per month,” Singh added.

According to DCP Harish Chander, the gang would essentially buy personal data – names of individuals, names of their family members, birth dates, and PAN card details – from workers of organisations with huge user databases, such as mobile service providers.

“After tampering with bill formats found online, the gang would use this data to create fake rent agreements and electricity bill forms.” Then they would pay fraudsters Rs 1,000-1,500 for each phoney Aadhaar card,” the DCP explained.

These forms were used to establish businesses and register them with the GST administration.

Following that, fraudulent e-way invoices would be generated to demonstrate that the firms were moving products and services. In addition, ACP Rajneesh Verma stated that the firms will be utilised to obtain input tax credit.

Cops are now looking for another seven persons who reportedly purchased the firms from the group. According to assistant DCP Shakti Avasthy, the GST department and other relevant authorities have been notified of the theft for further investigation.

According to the state GST officer quoted above, the scam is expected to be worth Rs 10,000 crore.

“The evidence and papers gathered have been examined. According to our estimations, the suspects robbed the GST department of nearly Rs.10,000 crore,” he added.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button
Join Membership

In case of any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"