DGGI uncovers ₹593-crore fake invoice racket; mastermind held in Bengaluru

Bengaluru: Officials of the Directorate General of GST Intelligence (DGGI), Belagavi Zonal Unit, have unearthed a Rs 593-crore fake invoice racket involving fraudulent claims of Input Tax Credit (ITC).

The alleged mastermind has been arrested in Bengaluru, officials said on Thursday.

The action follows a probe into a suspicious GST registration that triggered a series of coordinated search operations at premises linked to Star Tax Consultant in Bengaluru. Investigators claim to have uncovered a well-oiled syndicate engaged in issuing invoices without any underlying supply of goods or services, thereby facilitating wrongful availment and onward passing of ITC amounting to nearly Rs 235 crore.


According to an official statement, the preliminary investigation indicates that multiple GST registrations were floated and operated solely for generating bogus invoices and e-way bills. These documents were allegedly used by ultimate beneficiaries to fraudulently avail of tax credits.

The accused is said to have deployed online accounting software to systematically record and track transactions routed through a web of shell entities with no genuine business operations. The structure, the statement said, was designed to create a façade of legitimate trade while siphoning off tax credits.

Mohammad Saifullah, a registered GST practitioner identified as the key mastermind of the operation, allegedly managed several non-existent and shell GSTINs. He is accused of overseeing the issuance of fake invoices and e-way bills in exchange for commissions calculated as a percentage of invoice values. Officials said that upon being confronted with documentary and digital evidence, he admitted to his role in the scheme.

Saifullah was arrested on February 24, in Bengaluru under Section 69 of the CGST Act, 2017. He was produced before the Special Court for Economic Offences in Bengaluru, which granted transit remand for his transfer to Belagavi. He was subsequently presented before the JMFC-IV Court, Belagavi, and remanded to judicial custody.

Officials indicated that further investigation is underway to identify additional beneficiaries and ascertain the total quantum of fraudulent ITC availed through the network.