DGGI Delhi Cracks Down on 229 Bogus Firms Passing Fake GST ITC of ₹645 Cr, One Arrested

The Directorate General of GST Intelligence ( DGGI ), Delhi Zonal Unit, has cracked down on a massive fake Input Tax Credit ( ITC ) racket involving 229 dummy firms that were duly registered Goods and Services Tax ( GST ) registered, exposing fraudulent availment and passing of ineligible ITC of approximately ₹645 crore.

DGGI officers launched coordinated search operations across multiple locations in Delhi on the basis of specific intelligence received, and recovered a substantial cache of incriminating material.

Officials seized 162 mobile phones suspected to have been used for GST and bank verifications effectuated via OTP-based mechanisms, 44 digital signatures, and more than 200 cheque books linked to various shell entities. Investigators have stated that these findings corroborate the existence of a deeper network of non-existent firms created solely for issuing invoices without any actual supply of goods or services.

Preliminary investigation indicates that the entire ecosystem of bogus firms was operated by a Delhi-based syndicate that specialised in creating layered fictitious transactions to facilitate fraudulent ITC flows. The probe revealed that these entities were systematically used to rotate invoices, enabling beneficiaries to wrongfully claim ITC, in effect causing substantial revenue loss to the exchequer.

DGGI has identified one Mukesh Sharma as the key operator of the syndicate. Search evidence suggested that Sharma managed GST registrations and filed returns on behalf of the dummy entities, handled banking transactions, while orchestrating the broader movement of illicit funds across several layers.

Investigators allege that Sharma not only supervised the functioning of the entire network but also exercised control over financial channels used for circulating the proceeds of the fraud.

Given that the offences are cognizable and non-bailable under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017, officers arrested Sharma on 11.11.2025. He has been remanded to judicial custody.

The DGGI also suspects potential money-laundering involved where portions of the illicit proceeds are allegedly routed through an NGO and a political outfit. This aspect of the investigation is currently under deeper scrutiny to decrypt the extent of layering and involvement of additional entities.

The DGGI remains steadfast with the investigation, with further summons, forensic analysis of seized devices impending, to trace the end beneficiaries of the fraudulent ITC chain.

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