DGGI Arrests Mastermind in ₹1,825 Cr GST Refund Fraud at Delhi Airport
Investigations exposed a vast network of dummy firms, fake invoices, and circular fund flows used to claim fraudulent ITC and export refunds.
The Directorate General of GST Intelligence (DGGI), Ahmedabad Zonal Unit, apprehended Kapil Chugh, the key mastermind behind India’s largest GST refund fraud of approximately ₹1,825 crore, at IGI Delhi Airport on April 19, 2026, upon his return from Dubai.Chugh, a habitual economic offender wanted in several financial crime cases, had evaded investigation by ignoring 22 summons...
The Directorate General of GST Intelligence (DGGI), Ahmedabad Zonal Unit, apprehended Kapil Chugh, the key mastermind behind India’s largest GST refund fraud of approximately ₹1,825 crore, at IGI Delhi Airport on April 19, 2026, upon his return from Dubai.
Chugh, a habitual economic offender wanted in several financial crime cases, had evaded investigation by ignoring 22 summons issued by DGGI and fleeing abroad.
Investigations revealed that Chugh, along with associate Vipin Sharma, orchestrated a sophisticated scheme to fraudulently avail Input Tax Credit (ITC) and encash refunds on zero‑rated supplies. The network operated through dummy firms created using borrowed KYC documents, with non‑functional premises and no genuine business activity.
Dummy directors were mere name lenders, compensated monthly in cash, while all operations—GST registration, invoice generation, banking, returns, and refund claims—were centrally controlled by the masterminds.
The fraud relied on fake invoices, particularly for high‑value tobacco products, to generate ITC. These invoices were layered across multiple intermediary firms, creating an artificial trail of trading activity. Selected entities were projected as exporters, especially from Kandla SEZ, to claim refunds. In reality, exports were largely fictitious or grossly inflated, supported by fabricated e‑way bills and repeated vehicle numbers.
Parallel to paper transactions, low‑value tobacco products were procured locally without invoices, misdeclared as premium products, and exported at inflated values. No manufacturing facilities existed to justify such conversions. GST returns reflected inflated turnover, enabling fraudulent ITC accumulation and refund claims.
Financial analysis showed negligible genuine fund movement; payments were circular or withdrawn in cash. Multiple firms shared common contact numbers, IP addresses, and staff, confirming centralised control.
Beyond GST fraud, Chugh also misrepresented export turnover to siphon off ₹11 crore from Yes Bank, and has been charge‑sheeted by the CBI in another credit fraud case. Meanwhile, SEBI, in its order dated March 30, 2026, took action against Vipin Sharma, MD of Elitecon, for inflating the company's valuation through bogus billing linked to the GST fraud.
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