CGST busts two fake invoice frauds of ₹760 crore

Mumbai, Oct 12, 2024

CGST uncovered two major fake ITC frauds worth ₹760 crore, arresting two suspects involved in issuing fake invoices and misusing KYC documents.

The Central Goods and Services Tax (CGST) busted two alleged fake input tax credit (ITC) frauds, involving the issuance of fake invoices worth around ₹760 crore and arrested two accused for allegedly defrauding the government exchequer.

According to CGST sources, the cases allegedly involved fraudulent ITC GST of ₹140 crore by issuing fake invoices totalling around ₹760 crore. The CGST’s crackdown was part of the “Second Special All-India Drive against fake registrations”, the sources said.

After conducting search operations and investigation, the CGST found that the masterminds of the two rackets had allegedly set up 92 dubious firms to fraudulently avail ITC by generating fake invoices with the sole purpose of passing on fraudulent ITC to its various recipients without actual movement of goods/services, the sources said.

In the first case, the Thane CGST Commissionerate arrested one accused who allegedly registered 22 non-bonafide firms/companies and was involved in availing fraudulent Input Tax Credit (ITC) of ₹48 crores. Additionally, the accused had passed on ITC of ₹44 crores, totalling ₹92 crore, without any actual movement of goods or services. The accused was also allegedly involved in circular trading to inflate the turnover of these non-genuine firms.

The accused had also allegedly misused Know-Your-Customer (KYC) documents belonging to others to obtain GST registrations and open bank accounts. He was arrested on Thursday.

In the other case, pertaining to Palghar CGST Commissionerate, an alleged racket involving the issuance of fake invoices worth ₹320 crore without actual supply of goods and services, was detected. The CGST arrested an accused in the case on Thursday.

[The Hindustan Times]