The Directorate General of Goods and Services Tax Intelligence (DGGI), Meerut Zonal Unit claimed to have busted a major fake invoicing syndicate with a taxable turnover of Rs 1,481 crore. The syndicate is accused of passing on fraudulent input tax credit of Rs 275 crore through 102 fake firms to over 1,000 beneficiary companies.
The entire syndicate was being operated by four masterminds who have been arrested in connection with the incident. As per official reports, one of them was working with a placement consultancy firm. He used to arrange PAN, Aadhaar, electricity bill, address proof, and other documents required for GST registration.
How The Fraud Took Place
The mastermind enticed candidates with modest financial perks in exchange for surrendering their KYC documents. These KYC documents were then passed on to the other two masterminds, who used them to create fictitious companies, reported PIB.
These individuals were also in charge of opening bank accounts, managing cash flow, and overseeing all financial transactions of these sham enterprises. The fourth accused mastermind covertly managed a secret office where crucial operational activities, such as invoice generation, e-way bill creation, GST returns filing, and maintaining sale-purchase ledgers of the fraudulent firms.
The syndicate maintained connections with numerous middlemen who provided essential information for generating counterfeit invoices to benefit the ultimate beneficiaries. The investigation also reveals the involvement of bank officials in the establishment of bank accounts under the names of fictitious firms.
DGGI officers conducted coordinated raids at multiple locations and seized a vast cache of incriminating evidence, including Laptops, desktops, Electronic Storage Devices, PAN Card, Aadhar Card, Cheque-Books, more than 25 mobiles, SIM Cards used for receiving OTPs, rubber Stamps of shell entities, the report added.