GST officers arrest 3 for fraudulent ITC claims of Rs 557 cr, creating 246 fake firms

GST officers have unearthed two fake billing rackets involving 246 shell/fake entities involved in fraudulently passing input tax credit (ITC) of Rs 557 crore and arrested three key operatives. Forensic examination of seized laptops and mobile phones of the two masterminds led to the retrieval of ledgers, invoices, e-way bills, etc. Apart from this, WhatsApp chats/ voice messages evidencing the transactions of fake GST bills and illegal cash flow have also been retrieved.

An initial probe by GST officers has also indicated the involvement of bank officials in opening bank accounts in the name of fake firms, the finance ministry said.

"The Meerut Zonal Unit of Directorate General of GST Intelligence (DGGI) unearthed two major fake billing rackets involving 246 shell/fake entities, which have passed on fraudulent ITC of Rs 557 crore," a finance ministry statement said.


One of the rackets had close nexus with fake firms unearthed by Noida Police in June 2023, it added.

The finance ministry said two syndicates, being operated by masterminds Anand Kumar and Ajay Kumar, involved in creating and operating fake shell entities have been busted.

Several documents related to fake firms like forged stamps, debit/credit cards, chequebooks, Aadhaar cards, PAN cards, etc. were recovered from the secret offices of the two masterminds at Adhyapak Nagar and Paschimpuri, Delhi.

"This indicates the close nexus of these masterminds with brokers/agents which specialise in procuring IDs of poor, needy and susceptible people in lieu of petty monetary benefits. Both the masterminds have been arrested," the ministry added.

These two syndicates have issued invoices having taxable turnover of Rs 3,142 crore involving ITC of Rs 557 crore through 246 fake firms to more than 1,500 beneficiary firms.

"Major beneficiary firms are located in Delhi and others are spread across 26 other states. Vikram Jain, Proprietor of one such beneficiary firm, has also been arrested during the investigation," the ministry added.

All three accused were produced before Economic Offence Court, Meerut, on July 26 and have been remanded for judicial custody till August 8.