Fake billing scam: GST officers unearth tax credit racket worth ₹1,278 cr in Delhi, nab 1

The anti-evasion branch of Central Goods and Service Tax, Commissionerate, Delhi (East) busted a major racket, which generated fake bills worth about ₹1,278 crore, for fraudulently claiming ITC. A person has also been arrested in connection with the incident, the Finance Ministry said on Thursday.

Upon receiving specific intelligence, the officers of the CGST exposed a racket for generation of huge inadmissible input tax credit (ITC) through fake billing of ₹1,278 crore (approximately), the Finance Ministry’s statement read. It also said that the syndicate was being operated by floating seven different fake firms with the intent of passing of inadmissible credit to the tune of ₹137 crore.

GST officers raided over nine places to identify the taxpayers who were defrauding the exchequer, the GST officers raided more than nine places, spread over different locations in the national capital and Haryana. The modus operandi of fraudulent taxpayers included creation of bogus invoices/bills without actual movement of goods. Besides, fake e-way bills were generated to show transportation of goods.

“The mastermind of the entire racket, Ashish Aggarwal, has been arrested under Section 132 of the CGST Act on October 29 and has been remanded to transit judicial custody,” the statement said. It said the primary beneficiary firm of the bogus billing network was M/s Maya Impex, registered in the name of Aggarwal’s 66-years-old mother, through which fake ITC of ₹77 crore has been passed on.

“The fake billing operation was primarily engaged in generating and passing of fake ITC primarily to the milk products industry. Bogus invoices were raised against fictitious sale of milk products such as ghee, milk powder, etc. “It is pertinent to mention here that apart from the other number of distinct companies, major brands like M/s Milk Food Ltd was one of the major beneficiaries of this inadmissible credit,” the statement said.

So far, inadmissible ITC of more than ₹7 crore has been recovered and further investigations are underway to expose other fictitious billing entities associated with the syndicate who have defrauded the exchequer, it added. Separately, the Directorate General of GST Intelligence (DGGI), Gurugram arrested one person on charges of creating and operating fictitious firms on forged documents and passing fake input tax credit worth over ₹392 crore by way of issuance of invoices without any actual receipt or supply of goods or services.

Kabir Kumar, a resident of New Delhi, following his arrest, admitted to creation of 31 firms which have generated bogus invoices without actual supply of goods amounting to ₹2,993.86 crore and ITC amounting to ₹392.37 crore. “It is apparent from the investigation conducted till date, that Kabir Kumar created multiple proprietary companies merely on paper based in Gurgaon, New Delhi, Faridabad, Solan, Noida, Jhajjhar, Sirsa etc,” the ministry said.

“During the investigation of his premises, it was revealed that Kabir had also attempted to flee the city, however, he was prevented from doing so at IGI Airport by the DGGI Officers with the support of Customs and CISF officials,” it added.