Mumbai: The Directorate General of GST Intelligence (DGGI) has revealed a staggering 1,700 cases of fraudulent Input Tax Credit (ITC) amounting to Rs 18,000 crore from April to December. The finance ministry announced on Saturday that 98 individuals have been arrested in connection with these cases.
“In the current fiscal year, the Directorate General of GST Intelligence (DGGI) has placed special emphasis on identifying and apprehending the masterminds behind fake Input Tax Credit (ITC) and disrupting syndicates operating nationwide. Through data analysis aided by advanced technical tools, DGGI has exposed cases resulting in the arrest of tax evaders,” stated the Finance Ministry in a release.
The ministry explained, “These tax syndicates often exploit susceptible individuals, enticing them with jobs, commissions, bank loans, etc., to extract their Know Your Customers (KYC) documents, which were then used to create fake or shell firms/companies without their knowledge and consent.”
According to DCGI, a firm in Haryana’s Sirsa generated a significant number of E-way bills and is suspected to have created Rs. 1,100 crore worth of fraudulent ITC.
A beneficiary firm based in Jaipur, Rajasthan, was booked by DGGI for availing ITC from certain fake firms in Sonipat, Haryana, and Delhi, without receiving actual goods. The statement added, “Upon further investigation, it was revealed that Mr. Ashutosh Garg, a resident of Ghaziabad, Uttar Pradesh, the proprietor of M/s. Shree Jee Spices, Chandni Chowk, Delhi, was engaged in the creation, operation, and selling of fake firms for passing on ineligible ITC for a commission… Crucial evidence has been collected from the above premises, indicating that Mr. Garg passed on fake ITC amounting to Rs. 1,033 crore through 294 fake firms and received a commission at 1.25% of the taxable value. Furthermore, Mr. Garg was arrested and sent to Judicial Custody.”
In another case, four individuals were arrested for the ‘creation and operation of 122 fake firms through which fake ITC of Rs. 315 crore was passed on to the recipient firms without the concomitant supply of goods/services.’
The Finance Ministry also cited a case in which DCGI recovered six PAN cards and five Aadhar cards with the same photo but different names from a person who allegedly created 190 fake firms to generate and pass on ineligible ITC amounting to Rs. 393 crore.
