In one of the biggest input tax credit (ITC) fraud cases detected in the region, the Central Goods and Services Tax (CGST) Commissionerate, Ghaziabad, has uncovered a sophisticated fake invoicing racket involving fraudulent transactions worth ₹255 crore. The syndicate allegedly availed illegal ITC of ₹45.84 crore by generating invoices without the actual supply of goods. Officials confirmed the arrest of the alleged mastermind, Shakib Qureshi, owner of M/s Sunshine Steel, marking a major breakthrough in the ongoing investigation.
Qureshi was arrested under Section 69 of the CGST Act, 2017, and produced before the competent court, which remanded him to judicial custody. Authorities indicated that several other individuals associated with the network have been identified and are likely to be arrested soon.
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14 Non-Existent Firms Used to Operate the Entire Network
During the detailed investigation, the CGST team discovered that the racket operated through 14 shell firms, all created on paper with no physical business operations. These entities had been floated solely for the purpose of issuing fake GST invoices and facilitating fraudulent ITC claims.
Officials noted that the proprietor of Sunshine Steel, Shakib Qureshi, not only created these firms but also controlled their financial and digital operations. Many of the firms were found to be registered using the same mobile numbers, email IDs, and common addresses—raising initial suspicion and prompting deeper scrutiny.
The preliminary probe revealed that the accused had used forged documents and misused identity credentials to register these companies under GST, after which he issued bogus invoices running into hundreds of crores.
Fraud Model: Massive ITC Claims Without Any Actual Supply
Investigators outlined the modus operandi of the racket:
- GSTINs were obtained for companies that had no real business activity.
- Fake invoices were generated showing large-scale purchases and sales.
- No goods ever changed hands; the transactions existed only on paper.
- Buyers used these invoices to illegally claim ITC, causing substantial revenue loss to the government.
- The accused managed the entire cycle—invoice generation, bank trail manipulation, and GST return filings.
According to the CGST team, such networks create artificial credit chains that undermine the integrity of the GST system and inflict serious financial damage on the exchequer.
Digital Trail and Bank Transactions Exposed the Racket
The fraud began to unravel after the department analyzed multiple data points, including:
- Abnormal bank transactions in the accounts of the suspect firms
- Discrepancies in GST returns and e-way bill records
- Common IP addresses used to file returns for multiple entities
- Mismatch between declared turnover and actual business footprint
Subsequent raids led to the seizure of incriminating documents, digital evidence, mobile data, and records linking Qureshi directly to all the bogus firms.
CGST officials worked closely with the local police, who assisted in tracking and apprehending the accused.
Offences Under Section 132: Non-Bailable and Punishable with Rigorous Penalties
Authorities stated that the offences committed fall under Section 132 of the CGST Act, which covers serious crimes such as issuance of fake invoices, creation of shell companies, and illegal availing of ITC. These offences are non-bailable and carry stringent punishment, including imprisonment.
Officials added that the department will continue its crackdown on fake ITC networks as part of its “zero tolerance” approach toward tax evasion. Efforts are underway to trace additional beneficiaries and identify the financial trail associated with the fraudulent transactions.
