Massive GST Fraud Uncovered by DGGI in Delhi

The Directorate General of GST Intelligence in Delhi has exposed a major GST fraud involving 229 dummy firms, orchestrated by a Delhi-based syndicate. With a loss of Rs. 645 crore, the scam involves fake invoicing without service or goods supply. Key conspirator Mukesh Sharma has been arrested.

The Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit, has unveiled a significant GST fraud case involving the fraudulent use of Input Tax Credit (ITC) through a network of 229 dummy firms, controlled by a syndicate in Delhi. This was revealed in a statement released by the Ministry of Finance on Thursday.

Acting on clear intelligence, the DGGI launched coordinated raids across the capital, discovering extensive incriminating evidence such as documents, digital devices, and ledgers. These materials confirmed the operations of fictitious companies that issued invoices without delivering actual goods or services, the ministry stated.

The operation also uncovered 162 mobile phones suspected of OTP use for GST and banking, 44 digital signatures, and over 200 cheque books linked to various companies. Preliminary findings suggest these phantom entities fraudulently passed ineligible ITCs worth approximately Rs. 645 crore, significantly impacting government revenue. Mukesh Sharma, identified as the principal architect, was apprehended for his pivotal role in this elaborate network of fake firms and transactions.

Mukesh Sharma faces serious charges under the CGST Act, 2017, with offences that are both cognizable and non-bailable. Consequently, he was arrested on November 11 and is currently in judicial custody. The investigation further hints at possible money laundering, with illicit funds potentially funneled through an NGO and a political group. As authorities delve deeper, additional revelations are anticipated.

(With inputs from agencies.)