On Thursday, the police uncovered a gang responsible for a Rs 10,000-crore GST fraud scheme. Over the course of five years, the gang allegedly registered more than 2,000 companies using stolen or fake identities. These companies were then used to raise e-way bills and claim input tax credit (ITC) from the government. The gang reportedly stole PAN card details from 6.3 lakh individuals. Eight suspects were arrested in Delhi and sent to judicial custody, with others being sought. E-way bills are essential GST documents for transporting goods or services, helping the government monitor their movement.
The gang's fraudulent activities came to light when an editor of an online news portal filed a complaint after discovering that his PAN card details had been used to create two bogus companies. An investigation was initiated, and the police recovered information on 2,660 fake companies used to generate monthly e-way bills totaling Rs 2-3 crore each. The gang acquired personal data, including names, family details, birthdates, and PAN card information, from employees of companies with extensive user databases. They would then create counterfeit rent agreements and electricity bill forms, manipulate bill formats found online, and obtain fake Aadhaar cards from fraudsters.
These fabricated documents were used to register the fraudulent companies with the GST department. Fake e-way bills were then generated to make it appear as if the companies were involved in transporting goods and services. Additionally, the companies were sold to clients for amounts ranging from Rs 80,000 to Rs 90,000. The buyers of these fake companies would utilize them to claim ITC, convert black money to white, and take advantage of e-way bills. The police are currently tracking down seven individuals who allegedly purchased these companies.
The GST department and other relevant agencies have been alerted about the fraud, which is estimated to be worth Rs 10,000 crore. The accused have been charged under various sections of the Indian Penal Code, including cheating, forgery, and criminal conspiracy. Cases related to tax evasion, fake ITC, and false invoices have been on the rise nationwide. The finance ministry reported an increase in GST-related fraud from 12,574 cases in 2021-22 to 13,492 cases in 2022-23 (as of February). The creation of bogus firms, fraudulent GST registrations, and the use of manipulated Aadhaar data have been observed in major states.
In Noida, cases of GST evasion have more than doubled over three years. The district recorded 66 cases in the 2020-21 fiscal year, which increased to 91 cases in 2021-22 and another 134 cases in FY 2022-23. In total, fines amounting to Rs 75.82 crore have been collected. These incidents highlight the growing concern of tax evasion and fraudulent practices in the GST system.
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