DGGI officers uncover 6 shell companies issuing fraudulent invoices, Rs 48 crore fake IT claims

GST Intelligence wing DGGI has conducted searches on at least six premises in the city and uncovered fraudulent invoices worth Rs 266 crore and passing of fake ITC of Rs 48 crore from shell companies, the finance ministry said on Friday.

Investigation in a case initiated in Bengaluru by the officers of Directorate General of GST Intelligence, Bengaluru Zonal Unit, said four companies, with no business activity, have shown receipt of hundreds of crores worth of goods and services.

"The officers of Directorate General of GST Intelligence, Bengaluru Zonal Unit carried out searches in over six premises in Delhi, and uncovered fraudulent invoices worth over Rs 266 crore, involving availment and passing on of fraudulent Input Tax Credit (ITC) of Rs 48 crore from the shell companies," the statement said.


The investigation indicated that initially, the key mastermind was one of the CA/statutory auditor, who managed the transactions of these companies. Further investigation revealed that the structure of entities and shareholding pattern, along with changes in the same, the CA/statutory auditor was acting as director in a few of these shell companies at some point of time -- clearly establishing the links behind the origin of the six shell companies.

During searches on the premises of these companies, original documents, such as invoices and seals, were found in the premises of the mastermind. The key mastermind of the case has been arrested.

"DGGI Bengaluru Zonal Unit has initiated a comprehensive investigation into this fraud, which has implications for innocent investors in listed companies.

"Having found such pattern of GST frauds by use of circular trading and fake ITC by listed companies, DGGI has shared specific inputs with Sebi in the recent past for initiating action under the Sebi Act," the statement added.