GST Fraud: DGGI Pune detects GST Fraud of Rs.1,196 Crore involving Multiple Private Firms

The Directorate General of GST Intelligence (DGGI), Pune Zonal Unit, discovered a GST fraud worth Rs 1,196 crore and arrested one person in connection with the case. The investigation, which included searches at multiple locations in Pune, Delhi, Noida, and Muzaffarnagar, found a sophisticated network of fake companies involved in fraudulent Input Tax Credit (ITC) transactions, FinMin said in a statement on Wednesday.

The accused had established shell firms with no legitimate business operations, issuing phoney invoices and e-way bills to create the appearance of legitimate trade, according to the report.

However, it stated that these e-way bills had no RFID movements associated with them, demonstrating the lack of actual supply of goods. The fraudulent network permitted the obtaining and passing of fake ITC worth Rs 1,196 crore.

The arrested individual, a director of a private limited firm in Muzaffarnagar, was identified as the mastermind behind the operation. The investigation revealed that the cartel used a database of addresses, identities, email IDs, and phone numbers to obtain new GST registrations and avoid detection.

During several searches, officials discovered original invoices, financial records, company stamps, and seals, showing centralised control over multiple shell companies. So far, the investigation has found 20 such bogus companies that engage in no legitimate business activity. Authorities have also frozen one bank account linked to a fraudulent company, and further investigations are ongoing.