As part of their ongoing efforts to combat syndicates running fraudulent companies, the Directorate General of GST Intelligence (DGGI), Kolkata Zonal Unit, has successfully dismantled a significant crime syndicate operating across 19 states.
In this syndicate, an individual was involved in the creation of shell firms/companies, generating fake invoices without any actual supply of goods/services, and passing on fake Input Tax Credits (ITCs) for a commission.
A total of 127 fake companies were established, resulting in a significant amount of fake ITC, approximately Rs. 126.9 crores, during the financial years 2021-22 and 2022-23. The DGGI carried out extensive market surveillance and data analysis to gather human intelligence, which led to the identification and apprehension of the mastermind behind this fraudulent operation. The mastermind has confessed to being involved in these deceptive activities.
The mastermind behind this operation established shell firms/companies and obtained GST registration for fictitious entities by procuring Aadhar, PAN, and photographs from individuals at a minimal cost.
Mediators were involved in verifying the existence of these fake entities, to whom they issued fake invoices without any actual supply of goods or services, solely aiming to earn a commission on the total invoice value and facilitate the passing on of fake input tax credit.
They also generated fake e-way bills using fraudulent vehicle numbers obtained from local brokers, incorporating them in the invoices to obscure the fraudulent passing on of Input Tax Credit, ultimately aiding recipient entities in availing fake input tax credit. During the operation, three mobile phones and two laptops were seized.
The Mastermind has been arrested and produced before Additional Chief Judicial Magistrate, Sealdah and is remanded for judicial custody.
According to the press release, DGGI, Kolkata Zonal Unit along with DGGI (SNU) East has been in forefront in West Bengal in detecting fake ITC cases. During last F.Y. 2022-23, DGGI has booked 32 cases involving fake ITC of Rs. 242.47 crores, out of which Rs. 16.59 Crore have been recovered and 4 persons were arrested in connection to the above cases.
In this F.Y. 2023-24, in less than 4 months, four syndicates of fake invoices have been busted with total detection of Rs. 535 crores involving 156 shell firms/companies and 5 persons playing the role of mastermind have been arrested.
Following absolute Zero Tolerance against fake invoicing, DGGI is continuing its drive against more such syndicates and their masterminds, who are jeopardizing administration of GST by issuing fake bills. Any information received in countering fake ITC menace will be suitably rewarded as per CBIC guidelines.
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