The Meerut zonal unit of the Directorate General of Goods and Services Tax Intelligence (DGGI), has cracked down on a large-scale fake invoicing syndicate that issued invoices with a taxable turnover of ₹1,481 crore and nabbed four accused.
The accused were presented before the Economic Offence Court in Meerut on 04.11.2023 and have been remanded in judicial custody until 17.11.2023.
The fake issuance of invoices led to the passing of a fraudulent input tax credit of ₹275 crore through 102 fake firms to over 1,000 beneficiary companies. As per the ministry of finance, the ongoing investigation has also revealed the involvement of bank officials in the establishment of bank accounts under the names of fictitious firms.
"Through meticulous data mining and application of mind, the DGGI Meerut Zonal Unit has successfully dismantled a major syndicate operated by four masterminds," the finance ministry said in a release.
"One of them, working in a placement consultancy firm, was responsible for arranging PAN, Aadhaar, electricity bill, address proof, and other documents required for GST registration. To achieve this, the mastermind enticed candidates with modest financial perks in exchange for surrendering their KYC documents," it added.
These KYC documents were then passed on to the other two masterminds, who used them to create fictitious companies, the release said.
These individuals were also in charge of opening bank accounts, managing cash flow, and overseeing all financial transactions of these sham enterprises.
"The fourth accused mastermind covertly managed a secret office where crucial operational activities, such as invoice generation, e-way bill creation, GST returns filing, and maintaining sale-purchase ledgers of the fraudulent firms, took place," the ministry release pointed out.
To aid in their operations, the syndicate recruited several assistants. Further, the syndicate maintained connections with numerous middlemen who provided essential information for generating counterfeit invoices to benefit the ultimate beneficiaries, the release said.
"During the operation, DGGI officers conducted coordinated raids at multiple locations and seized a vast cache of incriminating evidence, including Laptops, desktops, Electronic Storage Devices, PAN Card, Aadhar Card, Cheque-Books, more than 25 mobiles, SIM Cards used for receiving OTPs, rubber Stamps of shell entities, it added.