The Directorate General of GST Intelligence (DGGI) and the CGST Commissionerates have unearthed over 6600 fake entities. These entities were allegedly involved in the issuance of fake invoice to help various companies to get Input Tax Credit (ITC) fraudulently and causing loss to exchequer.

So far, total of 215 persons arrested six Chartered Accountants, one Company Secretary and two women. GST intelligence authorities have also booked about 2200 cases and have also recovered more than Rs 700 crore from these fraudsters.

Sources in Revenue Department of Finance Ministries said that those arrested not only include the fake entities operators but also the end beneficiaries who connive with these fraudsters running businesses of fake invoices on commission basis. Out of the arrested persons so far, there are 71 masterminds, 81 proprietors, 36 director/managing directors, 15 partners, and three CEOs among others.

“Use of data analytics, data-sharing and AI along with BAFTA tool has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and pin-point the fraudsters with precise input,” a source said.

Sources said that in the last two days 17 arrests have been made in fake invoice frauds and further investigations are on. So far, maximum arrests have been made in Mumbai zone with 23 persons. Meanwhile, in two previous days Ahmedabad Zonal Unit has booked 14 cases and initiated actions against A K Impex, Mannat Impex, Roselabs Bioscience Ltd, Tushar Mehta, Makani Enterprise, Goodluck Traders, Priya Blue Metals, Krishna Marketing, Jaybhole Enterprises, Shree Shubhlaxmi Industries, S.K. Trading Co, C K Corporation, Shree Aashapura Traders and Niraj Cement Structurals. At least 8 of them were found to be non-existent and had availed or utilized ITC of more than Rs 113 crore through fake invoices in garments, copper waste scrap, medicines, ferrous waste and scrap, cement and coal, sources informed.

While CGST Bengaluru Zone have filed cases against five firms, CGST Indore Commissionerate detected cases against four fake firms for issuing high value invoices and passing on of the ITC of about Rs 6.82 to soyabean traders. DGGI Bhubaneswar Zonal Unit have filed three cases against Radha Krishna Sales Corporation, Varmora Steel and Cement and Mahalaxmi Iron, which were involved in fraudulent ITC of about Rs 45 cr on fake invoices of bars and rods, hot-rolled, iron or non-alloy steel and limestone, aluminium waste, copper waste and portland cement.

According to sources, in Chennai, DGGI Zonal Unit arrested M Ashokan (Managing Director) of Srimarg Human Resource Pvt Ltd along with his accountant for availing/ passing on fraudulent ITC of Rs. 22 cr on fake invoices of manpower services. This case is similar to that of food delivery chain Swiggy and that of Instakart, a subsidiary of e-com giant Filipkart. However, both of these e com companies have vehemently denied all these allegations.

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