GST Fraud Racket Uncovered: Fake Invoices Worth ₹658.55 Crore Detected
In a significant crackdown on tax evasion, the Central GST Itanagar Commissionerate has unearthed a fraudulent scheme involving the issuance of fake invoices valued at ₹658.55 crore without any actual supply of goods. This illicit activity has resulted in an estimated loss of approximately ₹100 crore to the government exchequer.
Discovery of the GST Fraud
The investigation revealed that a firm registered in Arunachal Pradesh, M/s Siddhi Vinayak Trade Merchants, was at the center of this fraudulent operation. The company had been facilitating the wrongful transfer of Input Tax Credit (ITC) amounting to ₹99.30 crore to 58 firms across the country. The fraudulent activities encompassed the creation of the firm using forged documents, generation of invoices without actual goods supply, and manipulation of GST returns to unlawfully avail ITC.
Seizure of Evidence
As part of the investigation, a search operation was conducted in Kolkata, leading to the seizure of significant evidence. Authorities confiscated electronic devices, including seven mobile phones and one iPad, which have been sent for forensic analysis. Additionally, miscellaneous documents such as 53 PAN/Aadhar cards of different individuals and 17 rent agreements connected to the fraud were recovered. The discovery of multiple KYC documents of fictitious individuals in the possession of the accused further highlighted the scale of the fraudulent activities. It was also found that the accused were actively managing and filing fraudulent GST returns from this location.
Arrests and Ongoing Investigation
The authorities have arrested two individuals, Ashutosh Kumar Jha and Bipin Kumar Jha, believed to be the masterminds behind this elaborate GST fraud. The investigation is ongoing, with forensic analysis of the seized electronic devices underway to uncover further details of the operation.
Government’s Measures Against GST Fraud
To combat such frauds and enhance compliance, GST formations under the Central Board of Indirect Tax and Customs (CBIC), Ministry of Finance, are conducting focused drives across the country. These initiatives aim to identify non-existent or bogus registrations and the issuance of fake invoices without any underlying supply of goods and services.
This case underscores the government’s commitment to identifying and dismantling complex networks of fraudulent transactions that exploit the GST system. The ongoing investigation is expected to reveal more insights into the methods employed by such fraudsters and aid in strengthening measures to prevent such activities in the future.
