Multi-state tax fraud syndicate involving Rs 1,047 cr busted, mastermind arrested

New Delhi [India], June 27 : In a drive against syndicates operating and managing fake firms, the Directorate General of GST Intelligence's (DGGI) Jaipur Zonal Unit has busted a major racked based in the national capital.

In a release, the Ministry of Finance said the syndicate was operating 569 fake firms and through them created huge fraudulent Input Tax Credit of Rs 1,047 crore.

The mastermind Rishabh Jain, aged 30, a resident of Delhi, according to the release, had hired 10 employees to operate these fake firms. The mastermind was arrested on Sunday and produced before Economic Offence Court, Jaipur, and is remanded for judicial custody till July 7, 2023.

"After extensive recce and data analytics, the officials of DGGI, Jaipur were able to trace this mastermind in Delhi and nabbed him," it added.

"The modus operandi indicates that the syndicate has a close nexus with various brokers to purchase firms, bank accounts, SIM Cards, to manage their RTGS/cash transfers and mediate between them and beneficiary firms. There are brokers/agents specialise in registering firms on GSTN using IDs of poor, needy and susceptible people and sell these registered firms to syndicates, who further issue fake invoices through them."

In 2022-23, 142 cases involving fake ITC of Rs 1,327 crore were booked, in which 9 persons were arrested. So far in 2023-24, 5 fake ITC cases involving Rs 1,531 crore have been booked with the arrest of 5 masterminds.

Last week, it had succeeded in cracking two big syndicates. Two masterminds were arrested from Jaipur on June 19 for running a fake ITC syndicate of Rs 320 crore.