GST intelligence officers unearth 461 fake entities involved in Rs 863 cr input tax credit fraud

Officials said the operation lasted for two days and was carried out after a recent case in Noida involving stolen PAN identity cards and creation of fake firms using GST returns.

tax credit fraud, GST, Goods and Services tax (GST), Business news, Indian express, Current Affairs

Tax authorities have identified registration-linked frauds as one of the key focus areas for tighter scrutiny in the financial year 2023-24 and are carrying out a special investigation against GST frauds. The GST clean up drive for fake registrations started on May 16 and will continue up to July 15.

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In an investigation involving 461 shell and fake entities, the Gurugram Zonal Unit of Directorate General of GST Intelligence has unearthed a racket involving fraud input tax credit of Rs 863 crore, a release issued by the Finance Ministry said Thursday.

Officials said the operation lasted for two days and was carried out after a recent case in Noida involving stolen PAN identity cards and creation of fake firms using GST returns.

“Recently, the Gurugram Zonal Unit of the Directorate General of GST Intelligence unearthed a major fraudulent Input tax Credit (ITC) racket involving 461 shell/fake entities, which had passed on fraudulent ITC of Rs. 863 crore. In this matter till date, two key operatives have been arrested,” the release said.

The ministry said a huge number of forged/ morphed/ fake soft copies of documents like rent agreements, electricity bills, aadhar card, driving licence, PAN card, etc. were detected in the laptops recovered from a secret office, which were used to create and operate their fake entities.
“The forensic examination of the laptops, devices seized from this office led to the eventual detection of ITC fraud to the tune of Rs. 863 crore involving fake 461 entities and arrest of two key operatives. Initial investigations indicate that the fraudulent ITC credit has eventually travelled to the highly evasion prone metal/iron & steel sector,” it said.