GST fraud busted: Officer among 7 arrested in Rs 54 crore fake firms scam

Joint Commissioner of Police, ACB, Madhur Verma said that besides the GST officer, three advocates, two transporters, and the owner of a fictitious company were also allegedly involved in the scam

The Anti-Corruption Bureau (ACB) of the Delhi Government has uncovered a massive Goods and Service Tax (GST) fraud involving 96 fake companies, amounting to Rs 54 crore, officials said on Monday. The scam was executed by a group of seven individuals, including a GST officer, identified as Babita Sharma.

Joint Commissioner of Police, ACB, Madhur Verma said that besides Sharma, three advocates: Raj Singh Saini, Narender Kumar Saini and Mukesh Soni; two transporters, and the owner of a fictitious company were also allegedly involved in the scam and relied on using about 100 fake companies to generate fake GST claims.

These fake companies were used to generate fraudulent invoices amounting to Rs 718 crore to claim GST refunds. These bogus firms were purportedly engaged in the import and export of medical goods, the report added.

Sharma is said to have hatched the conspiracy to cheat the GST department by using 96 fake companies. Between 2021 and 2022, she approved over 400 refunds, amounting to Rs 35.51 crore.

The advocates were the beneficiaries of the refund that she sanctioned. The transporters provided fake e-way bills and forged goods receipts and benefited from the refunds.

How did the GST department uncover the scam?

In September 2021, following Sharma's transfer to Ward 22 of the GST office, the GST Vigilance Department noted an unusual surge in migration requests. Within a few days, over 50 firms applied to move from Ward 6 to Ward 22, and their applications were quickly approved, which triggered suspicion and led the department to launch an investigation into the matter.

During a physical examination of the sites, the firms were found to be non-existent. Additionally, the ACB found that Sharma had approved the refunds without verification of Input Tax Credit, a crucial tool for detecting fraudulent claims. 

Additional irregularities were uncovered, including the use of identical PAN numbers, email addresses, and mobile numbers across multiple firms, as well as the absence of Aadhaar authentication for others.

(With PTI inputs)

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