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GST invoice fraud: 12 individuals, including CA, arrested for ITC scam

The arrested chartered accountant is Abhishek Singhal, who ran fake firms to issue fraudulent invoices; he is the tenth chartered accountant arrested so far over GST invoice fraud charges

GST invoice fraud: 12 individuals, including CA, arrested for ITC scam

In the ongoing nationwide drive against frauds involving fake GST invoices, the Directorate General of GST Intelligence (DGGI) and CGST Commissionerates have arrested 12 persons in a single day, including a chartered accountant.

The arrested chartered accountant (CA) is Abhishek Singhal, who ran fake firms to issue fraudulent invoices, informed Revenue Department sources. He is the tenth chartered accountant arrested so far over charges of running bogus firms and/or issuance of fake invoices to fraudulently avail and pass on input tax credit (ITC) without actual supplies of goods or services.

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

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The GST Department has so far arrested 329 persons in its ongoing crackdown on fake invoicing since November 2020. The GST intelligence and CGST authorities have booked more than 3,200 cases against 9,600 fake GSTIN entities as of now. Also, the authorities have recovered more than Rs 1,000 crore from these fraudsters.

Out of the 329 arrests so far, there are 131 masterminds, 113 proprietors, 46 directors/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 end beneficiaries who connived with these fraudsters issuing fake invoices.

Out of the 329 persons arrested so far, at least four persons have been booked under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).

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According to deaprtment sources, the GST authorities have been using deep data analytics, integrated data-sharing, and AI and ML tools along with BIFA to unearth ITC utilisation 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 the last two months - Rs 1.15 lakh crore in December, 2020 and Rs 1.20 lakh crore in January, 2021. Sources expect this upward trend in GST collections to continue for February as well.

ALSO READ: 4 people arrested in 3 different cases of ITC fraud of RS 178 crore

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