DGGI Uncovers ₹266 Cr GST ITC Fraud Involving 6 Shell Companies
The entities fraudulently claimed ₹48 crore in GST input tax credit through circular trading. A chartered accountant, believed to be the key orchestrator, has been arrested. Key evidence, including original invoices and company seals, was seized.
In a significant enforcement action, the Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit, has unearthed a large-scale fake invoicing network involving six shell companies. The operation, carried out across several locations in Delhi, revealed fraudulent transactions worth ₹266 crore and wrongful input tax credit (ITC) claims to the tune of ₹48 crore. One of the alleged masterminds, a chartered accountant, has been taken into custody.
The investigation stems from a case initiated by the Bengaluru unit, which found that the entities involved had no genuine business operations and were created solely to issue fake invoices and carry out circular trading to artificially inflate turnover. Notably, one of the companies linked to the fraud was listed on the stock exchange.
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Officials revealed that four of the entities had reported substantial receipt of goods and services without any physical activity, raising serious red flags. The probe led to a chartered accountant who had acted as statutory auditor and director in several of the companies. He is suspected of orchestrating the transactions, controlling shareholding structures, and directing backend operations.
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Searches led to the recovery of key documents, including original invoices and company seals, many of which were found in possession of the arrested individual as reported by NDTV.
A DGGI official stated that the case points to not only tax evasion but also potential risks to investors due to the involvement of a listed entity. The DGGI has launched a wider probe to trace further links and has shared intelligence with SEBI for regulatory scrutiny.
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