DGGI’s crackdown: ₹18,000 crore worth of GST evasion exposed, 1,700 fake ITC cases unearthed

Finance Ministry on Saturday reported that around ₹18,000 crore worth of GST evasion was detected during the April-December period of the current fiscal.

“1,700 fake ITC cases involving ₹18,000 crore have been detected and 98 fraudsters/masterminds have been apprehended by the Directorate General of GST Intelligence (DGGI),” the statement said. Fake invoice means no real supply of goods or services but invoice issuance, used fraudulently to avail input tax credit (ITC). Unscrupulous elements misuse the identity of other persons to obtain fake/ bogus registration under GST to defraud the Government. Such fake/non-genuine registrations are used to fraudulently pass on input tax credits to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both. Fake registrations and issuing bogus invoices for passing off fake ITC have become a serious problem, as fraudulent people engage in dubious and complex transactions, causing revenue loss to the Government.

According to the Finance Ministry statement, in the current financial year, DGGI has emphasised identifying and apprehending the masterminds of fake ITC  and disrupting syndicates, operating across the country. DGGI has unravelled cases using data analysis aided by advanced technical tools, which led to the arrest of tax evaders. These tax syndicates often use gullible persons and entice them with job/commission/bank loans, etc., to extract their Know Your Customers (KYC) documents, which were then used for the creation of fake / shell firms/companies without their knowledge and consent. In some cases, the KYC method was used with the knowledge of the concerned person by paying them small pecuniary benefits.

DGGI has not listed some of the cases. On basis of data analytics using E-way bill portal it was revealed that S.D. Traders, Delhi, was a newly registered firm with NIL inward supplies at the root level, yet it generated many E-way bills. Based on the investigation, 38 non-existent firms in the Delhi and Haryana areas were initially revealed. On analysis of the IP Address, premises at Sirsa, which were being used for filling out GST Returns, were identified. The search was conducted, and it was found that a well-organised racket of fake/bogus firms was being operated from the said premises. Certain documentary evidence, 2 Laptops, 7 mobile phones, and various SIM cards were seized, and Manoj Kumar, one of the key operators of the racket of fake firms, was arrested from Sirsa by the DGGI. The statement said that the analysis of outward supplies data indicates a potential evasion of ₹1,100 crores of fraudulent ITC.

Earlier this month, the Ministry said that over 29,000 fake firms were identified and over 44000 crores of GST tax evasion detected in a nationwide drive over 7 ½ months as a result of a special drive to identify non-existent/bogus registrations and issue fake invoices without any underlying supply of goods and services. The drive started in mid-May last year. A total of 29,273 bogus firms involved in suspected ITC evasion of ₹44,015 crore have been detected. This has saved ₹4,646 crore, of which ₹3,802 crore is by blocking of ITC and ₹844 crore is by way of recovery. So far, 121 arrests have been made in the cases, the Ministry said.

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