GST Scam: 29% GST-Aadhaar Fake Billing Scam Unfolds in Gujarat

Investigators have discovered that at least 25% of the estimated Rs 20,000 crore of fake billing took place in Gujarat, in a key breakthrough in the Bhavnagar fake billing scandal, which entailed tampering with Aadhaar data of unsuspecting people to fraudulently get GST registrations in their names.

According to sources familiar with the developments, fake billing of at least Rs 5,000 crore is likely to have occurred in Gujarat alone, with the amount of taxes avoided using these amounting to hundreds of crores.

The fraud was discovered in February during a spot verification exercise in Surat by SGST personnel. “The exact amount of fake billing is not yet known, but it is certain to rise as more beneficiaries are identified in Gujarat and other states,” a source said.

Mohammad Tata, the suspected mastermind of another Rs 739 crore false billing scandal involving Madhav Copper Limited, has been transferred from Ahmedabad’s Sabarmati Jail to Bhavnagar to be investigated for his role in the Aadhaar-GST fake billing scam. This lends validity to top SGST officials’ accusations that Bhavnagar was the hub of significant fraudulent billing schemes sweeping the state and the country.

Some 461 phoney firms were discovered in the recently filed initial chargesheet by the special investigation team (SIT) probing the scam. 236 of these have been investigated. According to reports, the true number of such shell corporations is in the hundreds.

During SGST searches on Aadhaar centres, it was discovered that cellphone numbers associated with around 2,800 Aadhaar cards had been altered.

According to sources in the investigating authorities, this is one of the country’s largest false billing schemes, with linkages to tax frauds perpetrated in various states, including Maharashtra, MP, Delhi, UP, Tamil Nadu, and those in the Northeast.

“The investigators made a significant breakthrough after discovering a new method of operation: falsifying Aadhaar data to obtain PAN cards and GST registrations. GST registrations generated with fudged Aadhaar data have been discovered in all major states,” according to a source.

“The SGST department has already alerted the departments concerned in other states to investigate these GST numbers and detect fake billing and tax evasion,” said the source.

At least 24 people have been detained in connection with the investigation thus far.