The Indian Government is spearheading a rigorous, multi-agency initiative, collaborating with the Enforcement Directorate, Finance Ministry, intelligence agencies, and state police forces, to probe an extensive GST fraud recently exposed by the Noida Police, according to sources.
A central intelligence agency has reportedly compiled an initial report based on the preliminary investigation, advocating the involvement of multiple agencies to unravel the depth of this scam. Allegedly, the fraudulent activities have resulted in a substantial revenue loss of Rs 955 crore for the central exchequer. Experts anticipate this figure could significantly escalate as the investigation progresses.
Preliminary analysis by authorities reveals that the scam has tentacles reaching across various states and Union Territories, with Delhi identified as the epicenter.
The central agencies are preparing to launch criminal investigations and prosecutions under Sections 120B and 420 of the IPC against individuals accused of procuring GST numbers through deceptive means and subsequently vending them to ‘clients’. In parallel, the Enforcement Directorate may initiate an investigation under the Prevention of Money Laundering Act, as per informed sources.
Officials have underscored that several Chartered Accountants overseeing major firms may also face legal repercussions for their alleged involvement in this intricate web of deception.
Investigating agencies are planning to meticulously verify approximately 3,700 beneficiaries in collaboration with state GST authorities, and subsequently freeze associated bank accounts. In addition, scrutiny will be focused on entities and individuals who frequently altered their Aadhaar details while maintaining low enrollments.
Authorities are set to annul GST registrations obtained through fraudulent credentials, in addition to pursuing other criminal and legal actions, according to officials.
Insiders disclose that professionals accepting substantial sums of money in exchange for exploiting system vulnerabilities will also face severe legal consequences.
The Noida Goods and Services Tax (GST) Input Tax Credit (ITC) scam revolves around the creation of numerous fictitious companies based on forged Aadhaar cards, involving the issuance of spurious invoices by these entities and the subsequent claiming of input tax credit (ITC) on their behalf.
Reportedly, the details of 6 lakh PAN cards were illicitly acquired from online portals and utilized to fabricate Aadhaar cards in the names of unsuspecting individuals who were compensated. These counterfeit Aadhaar cards were then allegedly used for GST e-registrations, which were subsequently sold to entities claiming input tax credit.
An analysis of the recovered datasets exposed that out of the 6 lakh PANs, 1,407 unique PANs were used to avail input tax credit through 1,907 distinct source GST numbers out of the total 2,514. Moreover, these 1,907 GST numbers were found to be linked with 741 unique mobile numbers.
In total, 3,745 unique beneficiary GST numbers were identified to be associated with 1,907 source GST numbers, illicitly receiving input tax credit totaling Rs 955 crore against a supply value of Rs 5,651 crore. These beneficiaries were dispersed across India, with a majority hailing from Delhi, as outlined by officials.
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