Luxury Cars, Stolen IDs, OTPs and Fake Invoices: Inside the Rs.5300 Crore GST Scam

About a year ago, a person in Noida reported that his identity was stolen and used for fake GST registrations. This started a police investigation in May 2023. Since then, it has become one of the biggest GST fraud cases, with 41 arrests and the discovery of around 2,660 fake companies generating Rs.5,300 crore in fake tax credits using bills worth Rs.15,300 crore.

Noida police found a group using stolen IDs to create fake companies and GST numbers. They shared this information with the GST Intelligence and Financial Intelligence Unit, leading to the identification of about 8,000 risky GST numbers linked to dubious IDs.

Over the last 8-9 months, authorities verified over 6,200 GST numbers, cancelling or suspending 40% of them due to fake IDs, non-existent goods or services, and fake addresses used for false tax claims.

Recently, Noida police arrested Sanjay Dhingra, a dairy manufacturer from Rajouri Garden, along with his wife and son, for using fake bills over the past 4 to 5 years. Earlier in March, Haryana businessmen Ajay Sharma and Sanjay Jindal were arrested for using fake documents to claim tax credits fraudulently. The suspects frequently changed their mobile numbers and kept them off, only turning them on to receive OTPs from delivery apps, which helped the police track them down.

Before the police got involved, DGGI had already arrested these businessmen last year. They kept changing their mobile numbers, some registered under their employees’ names. We tracked which numbers turned on after a few hours in suspected areas and noticed they used their phones only to get OTPs. We identified their IP addresses through internet providers, said Shakti Mohan Avasthy, DCP (Crime), Noida. FASTAG was used to track their luxury cars on the Delhi-Noida-Lucknow route, and they checked into hotels with fake identities by evening.

This has been one of the hardest arrests. Now we’ve caught those involved in all parts of the forgery and cheating case. Only a few are left to arrest.

Last year, DGGI charged these businessmen for fake ITC claims. After getting details from Noida police, DGGI found that Yoyo Traders passed fake ITC worth Rs.7.8 crore to AKS Traders, which passed it to Goodhealth Industries.

DGGI also found that the business addresses of nine supplier firms didn’t exist, with fake invoices totalling Rs 68.15 crore. Vehicle owners listed in 643 E-way bills denied providing their vehicles. Dhingra was arrested on June 8, 2023, and Jindal and Sharma were arrested by DGGI in July 2023.