GST Refund Scam Unearthed: 7 Arrested in Delhi

The Anti-Corruption Branch of Delhi has arrested seven individuals, including a GST officer, for orchestrating a scam involving fraudulent GST refunds worth Rs35.51 crore. Multiple fake firms were used in the racket. Investigations reveal over 500 non-existent firms and 1,000 linked bank accounts.

In a significant crackdown, the Anti-Corruption Branch (ACB) of Delhi has uncovered a scam involving fraudulent GST refunds within the Trade & Taxes department of the Delhi Government, leading to the arrest of a Goods and Services Tax officer and six associates. The accused allegedly ran a racket issuing fake invoices to claim GST refunds from the department.

Among the seven arrested were a GST officer, three advocates, two transporters, and a fake firm proprietor, ACB reported. They allegedly created 96 fake firms to siphon taxpayer funds by falsely claiming refunds. Notably, refunds worth Rs35.51 crore were approved between 2021 and 2022, with the majority disbursed in the latter year.

Babita Sharma, the GST officer involved, played a crucial role in the conspiracy. Transferred to Ward 22 in July 2021, Sharma suspiciously approved the migration of 53 firms to her ward, which were later found to be non-existent. These entities were used solely to claim bogus refunds swiftly without the mandatory Input Tax Credit verification. The fraudulent firms purportedly engaged in Rs718 crore worth of transactions, primarily built on forged purchase bills.

ACB's findings also revealed that the same group ran 23 out of the 96 fake firms. Using common email IDs and mobile numbers, they created fake invoices worth Rs176.67 crores, pocketing Rs5.81 crore in fraudulent refunds. Over 500 non-existent firms and about 1,000 linked bank accounts are implicated in the scam. The roles of other GST officials and proprietors are currently under investigation.