The Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, has unearthed a massive ₹643.81 crore fraudulent invoice scam, resulting in a ₹115.88 crore loss to the government through illegitimate GST Input Tax Credit (ITC) claims.
The investigation led to the arrest of Aboobakr Siddique Syed, a resident of Pernambut in Vellore, Tamil Nadu, who was apprehended in Bengaluru. He was taken into custody under Section 69 of the Central Goods and Services Tax (CGST) Act, 2017, which empowers authorities to arrest individuals involved in serious tax fraud.
According to N Mohammad Ali, Additional Director, DGGI Visakhapatnam, the accused established over 302 shell companies using stolen or misappropriated identities, which were then used to issue fake GST invoices for goods and services that were never actually supplied. These companies existed only on paper and were created to facilitate the illegal generation and transfer of input tax credit, allowing recipient firms to evade legitimate tax payments.
Fake Firms, Stolen IDs and Bogus Transactions Across Three States
The fraudulent operations spanned across Andhra Pradesh, Tamil Nadu, and Karnataka, with bogus firms used as fronts to generate a massive chain of false transactions. These firms were registered using identities of unsuspecting individuals, creating a smokescreen for authorities to penetrate.
The DGGI probe revealed that the modus operandi involved issuing invoices without any corresponding movement of goods or provision of services. These invoices were then used by beneficiary companies to wrongfully claim ITC and reduce their tax liabilities.
The 302 fictitious companies were registered with the sole purpose of generating and transferring fraudulent tax credits. This sophisticated scam not only undermined the GST system but also inflicted severe damage to the government’s revenue collections, especially at a time when regulatory enforcement is being strengthened across sectors.
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Arrest and Legal Action Underway
Following coordinated operations and surveillance in multiple locations, DGGI officials successfully apprehended Aboobakr Siddique in Bengaluru. His arrest is seen as a key breakthrough in dismantling the larger network of tax fraud syndicates operating in southern India.
Authorities are now working to identify the beneficiary firms that utilized these fake invoices and ITC claims. Legal proceedings have been initiated, and further arrests and seizures are expected as the investigation progresses.
The DGGI has emphasized that stringent action will be taken against all entities found to be complicit in such fraudulent activities. Taxpayers have been urged to verify suppliers and transaction authenticity to avoid legal consequences stemming from inadvertent involvement in GST fraud.