DGGI busts Rs 593 crore fake invoice fraud; mastermind arrested in Bengaluru

Belagavi: Officers of the Directorate General of GST Intelligence (DGGI), Belagavi zonal unit, unearthed a massive fake Input Tax Credit (ITC) racket involving fraudulent invoices worth about Rs 593 crore.The crackdown followed an investigation into a suspicious GST registration, which led to multiple search operations at premises linked to M/s Star Tax Consultant in Bengaluru. The search exposed a well-organised network allegedly engaged in issuing fake invoices without any actual supply of goods or services, enabling wrongful availment and transfer of ITC amounting to nearly Rs 235 crore.
Preliminary investigations revealed that several GST registrations operated solely to generate bogus invoices and e-way bills, ultimately allowing beneficiaries to fraudulently claim tax credits. The accused allegedly used online accounting software to record and track transactions routed through multiple shell entities that had no genuine business activity.Investigators identified Mohammad Saifullah, a registered GST practitioner, as the alleged mastermind behind the operation. He was found to be managing multiple non-existent GSTINs and orchestrating the issuance of fake invoices and e-way bills in return for commission calculated as a percentage of the invoice value. When confronted with evidence, Saifullah admitted to his role in the fraud, said officials.Saifullah was arrested on Feb 24, in Bengaluru under Section 69 of the Central Goods and Services Tax Act, 2017. He was produced before the Special Court for Economic Offences in Bengaluru, which granted transit remand for his transfer to Belagavi. He was later presented before the JMFC-IV court in Belagavi and remanded in judicial custody.Further investigation is underway to identify additional beneficiaries and determine the full extent of the fraud.