Mumbai: The Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit, has uncovered a large-scale fraud involving the wrongful availment and passing of Input Tax Credit (ITC) worth approximately ₹645 crore. The case centres on a network of 229 dummy firms registered under GST, allegedly controlled by a Delhi-based syndicate. Investigators found that these entities were issuing invoices without any actual supply of goods or services, enabling the circulation of ineligible tax credits and causing significant loss to the exchequer.
Search operations across multiple premises in Delhi led to the seizure of incriminating documents, digital devices and ledgers. Officials also recovered 162 mobile phones, believed to have been used for generating one-time passwords linked to GST and banking transactions, along with 44 digital signatures and more than 200 cheque books belonging to various firms. The evidence pointed to a coordinated effort to create and operate non-existent companies for the sole purpose of manipulating tax credits.
The investigation identified Mukesh Sharma as the key operator of the syndicate. According to DGGI, Sharma managed GST registrations, returns and records of the dummy firms, while also overseeing banking transactions and the layering of illicit funds. He was arrested on 11 November under Sections 132(1)(b) and 132(1)(c) of the Central GST Act, 2017, offences that are cognisable and non-bailable. He has since been remanded to judicial custody.
Preliminary findings suggest that the fraud extended beyond tax evasion, with indications of money laundering. Authorities reported that proceeds from the scheme were allegedly routed through an NGO and a political outfit, adding another dimension to the case. The matter is under further investigation, with officials examining the extent of financial flows and potential beneficiaries.
The exposure of this racket highlights the continuing challenge of tackling fake invoicing and ITC fraud under the GST regime. Such practices undermine the integrity of the tax system and erode government revenues. The DGGI’s action demonstrates the scale of enforcement required to address complex networks of shell companies and layered transactions. It also underscores the importance of digital trails, as mobile devices, electronic signatures and banking records provided crucial evidence in dismantling the operation.
The case is one of the largest uncovered by the Delhi Zonal Unit in recent months and is expected to have wider implications for compliance monitoring. With GST collections forming a critical component of government revenue, enforcement agencies are likely to intensify scrutiny of suspicious registrations and transactions. The arrest of Sharma marks a significant step in holding individuals accountable for orchestrating systemic fraud, while the broader investigation may reveal further links across financial and political channels.
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