Fake GST Frauds: 12 persons including CA held in 1 day, 329 so far

The Directorate General of GST Intelligence (DGGI) and CGST Commissionerates on Tuesday arrested 12 persons including a Chartered Accountant and a lady on charges of running fake firms created to issue fraudulent invoices.

The Chartered Accountant – Abhishek Singhal – is tenth from the profession so far who has been arrested for involvement in bogus firms and issuance of fake invoices to fraudulently avail and pass on ITC without actual supplies of goods or services.

The arrests have been made as part of the ongoing nationwide drive against fake GST invoice frauds launched by authorities since mid-November, 2020.

Sources said that out of the 329 persons arrested so far, at least four persons have been booked under COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Activities Act) while the GST intelligence and CGST authorities have booked more than 3200 cases against 9600 fake GSTIN entities as of now. Also, the authorities have recovered more than Rs. 1000 crore from these fraudsters.

According to Sources in the department of revenue, the GST authorities have been using deep data analytics, integrated data-sharing and AI & ML tools along with BIFA to unearth the input tax credit (ITC) utilization frauds via fake invoicing and bogus firms. The technology has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and their networking without any overreach and able to pinpoint the fraudsters with specific inputs to take targeted actions and further investigations against them.

It may be noted that the nationwide drive against fake GST invoice frauds have yielded record GST collections for over last three months and have fetched record collections of Rs. 1.15 lakh crore in December, 2020 and Rs. 1.20 lakh crore in January, 2021. Sources expect similar higher collection trend to continue in the month of February 2021 as well.

Sources said that the CGST Jaipur Zone, noticed that CA Abhishek Singhal was involved in three fake firms which were generating goods-less invoices of miscellaneous commodities. He did not co-operate with authorities during investigations, following which a chargesheet was filed against him in the Economic Offence Court where he surrendered later and was sent to judicial custody.

According to the Sources, out of the 329 arrests so far there are 131 masterminds, 113 proprietors, 46 director/managing directors, 17 partners, 5 CEOs/CFOs/CMDs, 10 chartered accountants, 4 accountants and one each of company secretary, broker, and GST practitioner. Arrested persons include fake entities operators and the end beneficiaries who connive with these fraudsters running businesses of fake invoices.