During the current Financial Year 2023-24, the Directorate General of GST Intelligence (DGGI) has intensified its efforts to dismantle syndicates orchestrating fraudulent Input Tax Credit ( ITC ) activities. As a result, a total of 1,700 cases, involving a staggering sum of Rs. 18,000 crore, have been detected, leading to the apprehension of 98 fraudsters and masterminds. The DGGI has employed advanced data analysis tools to uncover these elaborate schemes, highlighting the increasing sophistication of tax evasion tactics.
DGGI has unravelled cases using data analysis aided by advanced technical tools which led to the arrest of tax evaders. These tax syndicates often use gullible persons and entice them with job / commission / bank loan etc. to extract their Know Your Customers ( KYC ) documents which were then used for creation of fake / shell firms / companies without their knowledge and consent.
Important Cases Unearthed by DGGI
Sirsa, Haryana Racket:
A well-organized racket operating from Sirsa, Haryana, came under the DGGI’s radar. The analysis revealed M/s. S.D. Traders in Delhi, a newly registered firm with NIL inward supplies but a significant number of E-way bills. The investigation led to the identification of a premises in Sirsa, exposing a network of fake firms. The arrest of Mr. Manoj Kumar and the seizure of evidence pointed to a potential evasion of Rs. 1,100 crore.
Jaipur-based Beneficiary Firm:
DGGI booked cases against a beneficiary firm in Jaipur availing ITC from fake firms in Sonipat, Haryana, and Delhi. Mr. Ashutosh Garg, proprietor of M/s. Shree Jee Spices, was found engaged in creating, operating, and selling fake firms. Searches at his business and residential premises revealed evidence of passing fake ITC amounting to Rs. 1,033 crore through 294 fake firms.
West Sagarpur, Delhi Scheme:
Intelligence indicated the utilization of a specific IP address for filing GST returns of various fake firms in West Sagarpur, Delhi. The subsequent search revealed Mr. Mukesh Kumar Jha’s involvement, leading to the admission of creating and operating 122 fake firms. The masterminds, Mr. Amit Kumar Jha, Mr. Roshan, and Mr. Vansh Chaudhary, were arrested, acknowledging their role in passing on fake ITC of Rs. 315 crore.
OPCs for ITC Fraud:
A revelation surfaced about the formation or purchase of One Person Companies ( OPCs ) for ITC fraud, dealing mainly in the supply of services. A search in Pitampura, Delhi, uncovered evidence of 190 fake firms, passing on ineligible ITC amounting to Rs. 393 crore. Mr. Rahul, instrumental in operating these firms, was arrested with multiple forged PAN and Aadhar cards.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
Want to explore further? Check out our related book here:
