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DGGI uncovers GST fraud involving Rs 3,200 cr worth fake invoices, two held

The DGGI's Bengaluru zonal unit conducted searches at more than 30 locations across Bengaluru and Mumbai, uncovering a complex scam

A dedicated unit of tax sleuths tracking cases of evasion in the pre-goods and services tax (GST) era may cease to exist from financial year 2025-26 (FY26).

The total value of fake invoices involved in the scam amounts to over Rs 3,200 crore. | Representative Image

Press Trust of India Bengaluru

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The Directorate General of GST Intelligence (DGGI) in Bengaluru has uncovered a massive GST fraud amounting to Rs 3,200 crore and arrested two people in connection with the case.

A third suspect remains at large, Sucheta Sreejesh, Additional Director General of DGGI Bengaluru zone, said in a statement.

The DGGI's Bengaluru zonal unit conducted searches at more than 30 locations across Bengaluru and Mumbai, uncovering a complex scam.

The accused created bogus companies with no legitimate business operations, engaged in circular trading to inflate turnover, listed these companies on stock exchanges, and facilitated the fraudulent availing and passing of fake Input Tax Credit totaling Rs 665 crore.

 

The total value of fake invoices involved in the scam amounts to over Rs 3,200 crore, she said.

The investigation uncovered 15 dubious companies with no actual business activity. These firms reported receiving FMCG goods worth hundreds of crores, but only issued invoices for services like IT support, management consultancy, and advertising.

Despite a large number of inward e-way bills, none of the companies had any outward e-way bills. Nine of these companies are even listed on Indian stock exchanges, according to officials.

Investigation indicates that promoters of such dubious companies resorted to circular trading of fake invoices to inflate turnover, increase the share price, sell the shares subsequently and exit the company, duping common public of their money invested in shares of such companies, the statement said.

The probe also revealed that GST returns for most of these companies were filed from common IP addresses, suggesting that they were all operated by the same accused.

Further searches at the companies' premises uncovered original documents such as invoices and financial records, stored across several locations, indicating that the same individuals were managing the affairs of multiple companies.

Considering the magnitude of the fraud and its impact on the common public, the Directorate General of GST Intelligence, Bengaluru Zonal Unit has initiated thorough investigation in the matter, Sreejesh said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Jan 29 2025 | 8:12 PM IST

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