NEW DELHI: The Anti-Corruption Branch (ACB) has arrested three main conspirators and four proprietors of the fake firms who were allegedly involved in an alleged GST refund scam of Rs 54 crore.
As per the ongoing investigation, the probe agency has so far uncovered forged invoices amounting to approximately Rs 718 crore. Earlier, the ACB had arrested seven people, including a GST officer in the Delhi government and three advocates who were all involved in the case.
Sharing details of the case, ACB chief Madhur Verma said the matter came to light after the Vigilance Department found some irregularities in the functioning of ex-GST officer Babita Sharma.
Sharma was performing her duties in Ward No. 6 till July 2021. On her transfer to Ward No. 22 in July 2021, 53 firms suddenly applied for migration from Ward No. 6 to Ward No. 22 and the requests were approved in a very short span of time by the officer.
Suspecting foul play, the Vigilance-GST Department sent special teams of GST inspectors in September 2021 for physical verification of these firms at their place of business. “All these firms were found to be non-existent and non-functional during verification,” the Joint CP said.
Accordingly, Additional Commissioner (Trade & Taxes) Vivek Aggarwal ordered a preliminary inquiry into the matter after which it was referred to ACB for detailed investigation and unearthing the whole scam.
The anti-corruption body registered an FIR under multiple sections of the Prevention of Corruption Act and began probing the matter.
During the investigation, the ACB found that fraudulent GST refunds were approved by the officer without verification of Input Tax Credit (ITC), which is a crucial instrument in the identification of bogus refunds, which caused a direct loss to the government exchequer.
“Input Tax Credit has been taken against fake invoices amounting Rs. 718 crores approximately. This means the fake firms did bogus purchasing of this amount. It also indicates that the running of the business has been shown only on documents,” the ACB chief said.
He said that about 1,000 bank accounts emerged during the screening of 127 bank accounts, directly related to fakefirms, their family members and employees. At the end of the money trail, the accused advocates were found to be the beneficiary of fraudulent refunds.
The latest arrested individuals include three conspirators -- Akram Ali, Vikesh Kumar Bansal and Ankur Saluja -- and four proprietors -- Hanzala, Imran, Intzar and Pramod Kumar.
Recently, the Directorate General of Goods and Services Tax Intelligence (DGGI) launched a sweeping investigation into a major GST evasion racket, uncovering over 200 fake companies involved in fraudulent transactions across the country.
Based on intelligence provided by the DGGI, the Ahmedabad Crime Branch had conducted simultaneous raids across 14 locations, including Ahmedabad, Junagadh, Surat, Kheda, and Bhavnagar. Sources had revealed that the investigation spanned 33 locations nationwide, with a focus on fraudulent ITC claims, amounting to crores. In the crackdown, several key builders and operators have been identified so far.
What raised the alarm bell?
In 2021, a GST officer, Babita Sharma, was transferred from Ward No. 6 to Ward No. 22.
Upon her transfer, 53 firms also applied for migration of their files from Ward No. 6 to Ward No. 22.
The requests were approved quickly, which raised suspicion.
The Vigilance-GST Department sent teams for physical verification of these firms
All these firms were found to be non-existent