Directorate General of GST Intelligence busts Rs 30cr fake ITC network

Time of India

2 days ago

Chandigarh: In a crackdown on financial fraud, the Directorate General of GST Intelligence (DGGI), Chandigarh Zonal Unit, on Friday claimed to have busted a network involved in generating fraudulent input tax credit (ITC) through the issuance of invoices without the actual supply of goods.
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Preliminary probe indicated a widespread network of bogus firms, with the quantum of fraudulent ITC currently estimated at approximately Rs 30.21 crore. The authorities anticipate the figure to increase as the investigation progresses.
The intricate scheme involved multiple business entities, including a smelting firm located in Ludhiana, found to be issuing fake invoices for zinc products.
The investigation has resulted in the arrest of the alleged mastermind, Manmohan Singh, who was instrumental in establishing and operating this racket, creating the aforementioned firms to generate and avail ineligible ITC.
Manmohan is alleged to have colluded with other individuals, currently under the agency's scanner, to facilitate banking transactions and arrange cash movements in exchange for commissions to enable these illicit activities.
The firms included JHA and JHA Enterprises, Goyal Trading Agency, MAA Vaishno Enterprises, SS Enterprises, PC Techno Solutions, and PMI Smelting Private Limited.
"Given the severity of the offense, the substantial financial fraud involved, and the potential for evidence tampering and witness influence, Manmohan Singh has been remanded to judicial custody," said an official spokesperson of the DGGI.
The spokesperson said the DGGI was committed to check tax evasion and preserve the integrity of the Goods and Services Tax (GST) system.
The DGGI highlighted that such fraudulent activities not only distorted market equilibrium by disadvantaging legitimate taxpayers but also resulted in significant revenue loss to the exchequer, impacting govt resources for public welfare and infrastructure development.
Earlier this month, a Ludhiana-based electronics firm was accused of a GST scam on iPhone supply, involving fake invoices, fraudulent companies, and non-existent supplies.
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Four individuals had been booked for the alleged fraud under the relevant sections of law and under the GST Act.
The scheme encompassed the creation of fake invoices, establishment of fraudulent companies, and declaration of non-existent iPhone supplies. It underscored the persistent challenge posed by illicit input tax credit (ITC) schemes, which leverage fictitious entities to transmit ITC without the genuine supply of goods.
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