The Directorate General of GST Intelligence (DGGI), Pune Zonal Unit, has uncovered a massive Rs 1,196 crore GST fraud, leading to the arrest of a key suspect. The investigation, spanning multiple locations including Pune, Delhi, Noida, and Muzaffarnagar, exposed a network of bogus companies involved in fraudulent Input Tax Credit (ITC) transactions. The accused orchestrated the scam by setting up shell entities with no real business operations, generating fake invoices and e-way bills without actual goods movement, thereby fabricating trade activity to claim ITC fraudulently.
Authorities identified the arrested individual as the director of a private firm in Muzaffarnagar, believed to be the mastermind behind the operation. Investigations revealed that the cartel maintained an extensive database of addresses, identities, and contact details, which were strategically rotated to create new GST registrations and evade detection. The fraudsters exploited personal details of unsuspecting individuals from economically weaker sections, using their credentials to establish fictitious businesses without their knowledge. By engaging in circular trading, where companies acted as both suppliers and recipients, they facilitated large-scale ITC fraud while masking their illicit activities under private limited firm structures.
During searches, officials recovered original invoices, financial records, and company seals, confirming centralized control over the fraudulent network. Investigators have so far identified 20 shell companies with no legitimate business operations and have frozen at least one bank account linked to the scheme. The fraudulent firms manipulated ITC to settle tax liabilities while passing on fake credits to beneficiaries. Authorities continue to probe deeper into the case, with further legal actions expected as the investigation unfolds.