New Delhi: As many as 215 persons have been arrested in the last two months across the country in a drive against fake GST invoice fraud cases perpetrated through fake entities and fly-by-night operators who fraudulently availed input tax credit (ITC) in multi-layered scams.
Those arrested by the Directorate General of GST Intelligence (DGGI) and the CGST Commissionerates include six Chartered Accountants and one Company Secretary, sources said.
Others arrested include 71 masterminds, 81 proprietors, 36 Directors or Managing Directors, 15 partners, three CEOs, and one each broker and GST practitioner, the sources added.
GST intelligence authorities have also registered around 2,200 cases and unearthed more than 6,600 fake GSTIN entities. Authorities have also seized more than Rs 700 crore from these fraudsters.
The sources said that those arrested included operators of fake entities and end- beneficiaries who connived with these frauds in running the business of fake invoices on commission basis.
Use of data analytics, data-sharing and AI along with BAFTA tool 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 the menace of fake invoice frauds and misutilisation of ITC, the Union government has acted on the recommendations of Law Committee of GST Council and placed qualified restrictions of 1 per cent on the use of ITC for tax liability in a manner that does not impact ease-of-doing business for genuine taxpayers.
DGGI sources said that in the last two days, 17 arrests have been made in fake invoice frauds and further investigations are on. So far, a maximum of 23 arrests have been made in Mumbai zone.
In the last two days, Ahmedabad Zonal Unit officials have registered 14 cases and initiated actions against AK Impex, Mannat Impex, Roselabs Bioscience, among others.
At least eight companies were found non-existent but had availed or utilised ITC of more than Rs 113 crore through fake invoices in garments, copper waste, medicines, ferrous waste, cement and coal, the sources said.
While CGST Bengaluru Zone registered cases against five firms, CGST Indore Commissionerate detected frauds by four fake firms, including Kundan Enterprises and Balaji Trading, for issuing high-value invoices and fraudulently passing on the ITC benefit.
The DGGI Bhubaneswar Zonal Unit registered three cases against Radha Krishna Sales Corporation, Varmora Steel and Cement, and Mahalaxmi Iron, for alleged involvement in fraudulent ITC of around Rs 45 crore on the basis of fake invoices of bars and rods, hot-rolled iron or non-alloy steel and limestone, aluminium waste, copper waste, and portland cement.
Similarly, the sources said that the Delhi CGST Zone detected a case wherein ITC to the tune of Rs 150 crore was fraudulent availed or passed on by B2X Sales India Pvt Ltd that dealt in LED TVs and scrap.
Firm Director Amit Bindal was arrested on charge of setting up more than 12 bogus firms. Also, in case of Aryan Mittal, further investigations against Vishal Metal led to unearthing of fraudulent ITC of Rs 14 crore on fake invoices of water-fitting valves. In this case, Dinesh Jain, who had allegedly floated four bogus firms, was arrested.
Similar arrests were made in Chennai and Hyderabad as well. Further investigations in all these cases were in progress, the sources said.