Syndicate of 48 fake firms availing over Rs 199 cr false ITC claims busted

GST officers have busted a syndicate of 48 fake firms which availed fraudulent input tax credit (ITC) of over Rs 199 crore and have arrested three people in this regard, the finance ministry said on Tuesday.

The Central Goods and Services Tax (CGST) Delhi East Commissionerate commenced coordinated 'Operation Clean Sweep' against fake billers, based on gathered human intelligence, which was further developed through data mining and data analysis.

A syndicate of 48 interconnected fake firms availing fraudulent ITC of over Rs 199 crore was busted in the operation, the ministry said.

In the first wave of the operation, a total of 48 fake/bogus firms either non-existent or paper firms have been identified that were dealing in bogus invoices. Three persons were apprehended and arrested and subsequently sent to judicial custody remand for two weeks by the Chief Metropolitan Magistrate Court, Patiala House.

Other members of the syndicate and the ring leaders have been identified and further investigation is being carried out, the ministry said.

One of the apprehended persons who happened to be the proprietor of M/s M.K. Traders was found to have availed fraudulent ITC of more than Rs 5 crore of which a major portion had been passed on to other connected links.

The other two apprehended persons were aiding and abetting the syndicate and instrumental in functioning of the syndicate.

Incriminating material, including stamps belonging to 55 different firms, several SIM cards and documents like Aadhaar cards, and electricity bills belonging to the third party were recovered during the operation.

"The entire operation was conducted in difficult terrain, involving narrow bylanes and sensitive areas of Delhi which was only possible due to amicable cooperation of Delhi Police which deployed adequate police personnel to assist the GST officers," the statement added.