DGCI arrests 215 people in fake invoice cases in 2 months

As many as 215 people have been arrested in the last two months by the Directorate General of GST Intelligence (DGGI) and the CGST Commissionerates in their concerted drive across the country against GST fake invoice frauds.

According to the sources from the Department of Revenue, about 2,000 cases have been booked and over 6,600 fake GSTIN entities have been unearthed. The frauds were carried out by fake entities and fly-by-night operators who fraudulently avail, pass on and utilise input tax credit (ITC) in multi-layered scams.

The 215 arrested people include 71 masterminds, 81 proprietors, 36 directors/managing directors, 15 partners, 3 CEOs, six chartered accountants, and one each company secretary, broker, and GST practitioner.

Data analytics, data-sharing, and AI along with BAFTA tools enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and pinpoint the fraudsters with precise input.

To further tackle fake invoice frauds and misutilisation of ITC, the government has placed qualified restrictions of 1 per cent on the use of ITC for tax liability in a manner that does not impact the ease of doing business for genuine taxpayers.

"In the last two days 17 arrests have been made in fake invoice frauds and further investigations are on. So far, maximum arrests have been made in Mumbai with 23 persons. Meanwhile, in two previous days Ahmedabad Zonal Unit has booked 14 cases," DGGI sources said.

While CGST Bengaluru Zone booked cases against five firms, CGST Indore Commissionerate detected cases against four fake firms, they added.

In Chennai, DGGI Zonal Unit arrested M Ashokan, Managing Director of Srimarg Human Resource Pvt Ltd along with his accountant for availing/passing on fraudulent ITC of Rs 22 crores on fake invoices of manpower services.

Similar arrests were also made in Delhi and Hyderabad.

Cases of fraudulent availment/passing of ITC amounting to Rs 150 crores and Rs 14 crores were detected in the national capital.

CGST Hyderabad Zone arrested three persons and booked cases on the basis of intelligence received from Maharashtra State GST Department, for fraudulent availment of ITC and fraudulent IGST refund of Rs 33 crores on fake invoices of footwear. The bank accounts of the firms were provisionally attached, the sources said.

An investigation is currently underway in all cases.

( With inputs from ANI )