New Delhi: In a major crackdown on Goods and Services Tax (GST) fraud, the Directorate General of GST Intelligence (DGGI), Ahmedabad has uncovered a ₹63 crore fake Input Tax Credit (ITC) scam involving a Delhi-based company. The agency has arrested the company’s director for allegedly orchestrating a complex tax evasion network using fraudulent invoices.
According to investigators, the accused company was generating fake invoices without any actual supply of goods or services. These invoices were then used to illegally claim ITC, causing significant loss to government revenue.
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Officials revealed that the entire fraud was executed through a network of shell companies that existed only on paper. These entities had no real business operations but were registered under GST to create a façade of legitimate trade activity. Using these fake firms, invoices were continuously generated and circulated within the network.
The investigation further found that the accused had created a layered structure of shell companies, through which fake invoices were passed from one entity to another. This system allowed beneficiary companies at the end of the chain to claim tax credits without any real commercial transactions taking place.
Authorities also reported suspicious financial activity in multiple bank accounts linked to these fake firms. Investigators are now scrutinizing banking records and digital transaction data to trace the flow of funds and identify other individuals involved in the racket.
Officials stated that this case is part of a broader nationwide crackdown on fake billing networks and GST evasion cases. In recent months, DGGI has detected several large-scale frauds involving hundreds of crores, highlighting a growing pattern of organized tax crimes using digital and paper companies.
Enforcement agencies explained that such scams typically involve the creation of dummy companies used to issue fake invoices. These invoices are then passed on to other businesses, which falsely claim input tax credit without any actual purchase of goods or services.
Experts note that such fraudulent practices not only result in massive revenue losses for the government but also harm honest taxpayers. Fake ITC networks distort market competition and undermine the integrity of the tax system by allowing illegal tax benefits to flow through artificial transactions.
Authorities have indicated that further arrests are likely as the investigation progresses. Preliminary findings suggest the involvement of additional companies and individuals, and the full extent of the network is still under examination.
The accused director is currently under custody and is being interrogated to determine the duration of the fraud and the identities of other participants. Officials believe that continued investigation will likely reveal deeper layers of the network and possibly uncover a wider interstate fraud operation.
