GST Officials Unearths Fake Invoicing Racket of Rs 611 Crore Involving Tax Evasion of 38.5 Crore

The officials of the Delhi South CGST Commissionerate collected special intelligence on certain fictitious organizations that were set up expressly for the aim of creating fake invoices and moving ineligible input tax credit along the supply chain.

Searches and inspections were carried out across Delhi, revealing a cartel operating 54 fictitious companies formed in the Delhi-NCR region, which were engaged in phoney invoicing and circular trading. The search premises yielded incriminating documents such as rubber stamps and letterheads from several businesses, as well as mobile phones, laptops, and other electronic devices.

So far, preliminary investigations into these transactions have uncovered bogus invoicing in the amount of Rs. 611 crores and tax evasion in the amount of Rs. 38.5 crores. In their confessional admissions, cartel members acknowledged their responsibilities in administering these fictitious businesses.

The perpetrators of the bogus firms plotted a scheme to defraud the government and committed cognizable and nonbailable offences under sections 132(1)(b) and 132(1)(c) of the CGST Act 2017. On February 23, 2012, three main members of the cartel were arrested: Sh. Ankit Gupta, the mastermind behind these phoney firms, and two of his accomplices, Sh. Rabiendra Singh and Sh. Rajendra Singh. The defendants were brought before the Duty Magistrate and remanded in judicial detention for a period of 14 days.

Further investigation is under progress.