7 held In GST Refund Fraud Worth Crores

New Delhi: Blowing the lid off a massive GST fraud racket, the anti-corruption branch (ACB) of Delhi govt has arrested seven people, including a now suspended GST officer, three advocates, two transporters and a proprietor of fake firms, for their alleged involvement in the scam.
The fraudulent GST refunds granted to fictitious firms amounted to about Rs 54 crore, with forged invoices totalling Rs 718 crore discovered during the investigation.Nearly 500 non-existent firms were found to be engaging in business activities, including the export of medicines and medical items, solely on paper to claim fraudulent GST refunds, officials said Monday.
ACB has identified glaring procedural lapses and malpractices on the part of the arrested GST officer, resulting in a substantial loss to the exchequer.
According to ACB chief, joint commissioner Madhur Verma, fraudulent GST refunds were being approved without verification of input tax credit, causing a direct loss to the govt exchequer.
“Input tax credit has been taken against fake invoices amounting to Rs 718 crore. In the case of 15 firms, there was neither Aadhaar authentication at the time of registration nor physical verification of the firm. Five firms were found registered under the same PAN/email ID/mobile number, which was used for multiple GSTIN registrations,” Verma said.
“Forged expressway bills for carrying items and goods receipts were used in refund applications. Twenty-three out of 96 fake firms are being run by the same group of offenders, i.e., accused advocates using common email IDs and mobile numbers,” Verma added.
ACB also detected rotation of refund amounts through multiple bank accounts to benefit the accused advocates and their family members. Around 1,000 more bank accounts emerged during the screening of 127 bank accounts, directly related to fake firms, their employees and their family members.
According to officials, a suspicious pattern of firm migrations led to a full-blown probe into a potential GST scam.
The accused GST officer, Babita Sharma, was transferred from Ward No. 6 to Ward No. 22 on July 26, 2021. She was found to have approved 53 firm migration requests in a short span, raising red flags.
A physical verification of these firms on Sept 23, 2021, revealed that all 53 firms were non-existent and non-functional. This prompted a preliminary inquiry, led by Vivek Aggarwal, additional commissioner (trade and taxes) on Oct 5, 2021. The inquiry’s findings led to the case being referred to the ACB on Dec 6, 2021.
The ACB said it had registered a case under the Prevention of Corruption Act and IPC sections related to cheating, forgery and criminal conspiracy.
The other accused were identified as Raj Singh Saini, Narender Kumar Saini, Mukesh Saini, Manoj Goyal, Surjeet Singh and Lalit Kumar. They are advocates, proprietor and transporters by profession.