How Did GST Officials Uncover a ₹31.95 Crore ITC Fraud in Delhi?
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Synopsis
A ₹31.95 crore ITC fraud has been unearthed in Delhi, leading to the arrest of the company director. This case underscores the government's commitment to tackling tax evasion and ensuring market integrity as officials leverage advanced analytics to combat fraud.
Key Takeaways
- ₹31.95 crore ITC fraud unearthed in Delhi.
- Director of the company arrested.
- Company involved in claiming ITC on fake invoices.
- Government enhancing measures to tackle fraud.
- Significant increase in detected ITC fraud cases.
New Delhi, Oct 31 (NationPress) - Central GST officials have successfully uncovered a fraudulent scheme amounting to ₹31.95 crore in the capital city, involving a company that was illicitly claiming Input Tax Credit (ITC) through fabricated invoices. The company’s director has been apprehended, as stated in an official release on Friday.
The anti-evasion unit of CGST Delhi South Commissionerate has exposed a significant case of fraudulent ITC claims. The company’s director has been arrested for masterminding the evasion of Goods and Services Tax (GST) totaling around ₹31.95 crore and has been presented before a competent judicial authority, which has placed him in judicial custody for 14 days, according to the statement.
Investigations indicated that the company was engaged in claiming fraudulent ITC purely based on invoices without any actual supply of goods or services.
Acting on credible intelligence gathered by the anti-evasion division, a probe was launched into a questionable supply chain. The inquiry revealed that the firm had claimed ITC without any genuine movement of goods. Further investigations confirmed that the firm had availed and transferred ineligible ITC from fictitious and non-existent entities, grossly violating the provisions of the CGST Act 2017, the statement noted.
This case is part of a larger initiative by the CGST Delhi South Commissionerate to uncover fraudulent ITC activities that result in significant revenue loss and compromise fair market practices. The department is employing data analytics and supply chain mapping techniques to proactively detect and dismantle such fraudulent operations, as mentioned in the statement.
Additionally, the number of ITC fraud cases identified by Central GST entities has more than doubled in the past three years, rising from 7,231 cases in 2022-23 involving ₹24,140 crore to 15,283 cases in 2024-25 involving ₹58,772 crore, based on recent information presented in Parliament.
The government is implementing proactive measures to prevent and address fraudulent ITC claims. These measures include permitting input tax credit only for invoices or debit notes provided by the supplier in FORM GSTR-1 and details communicated to the registered person in FORM GSTR-2B.
As part of these initiatives, a registered person is prohibited from submitting FORM GSTR-1 if they have not submitted the return in FORM GSTR-3B for the preceding tax period, as per government regulations.
Point of View
We recognize the significant efforts by GST authorities in combating tax fraud. This case serves as a reminder of the importance of vigilance and integrity in our tax systems, ensuring a level playing field for all businesses in the nation.
NationPress
31/12/2025
Frequently Asked Questions
What was the amount involved in the GST fraud?
The amount involved in the GST fraud was ₹31.95 crore.
Who was arrested in connection with the fraud?
The director of the company involved in the fraudulent activity was arrested.
What measures is the government taking against ITC fraud?
The government is implementing measures such as allowing input tax credit only for verified invoices and requiring compliance with FORM GSTR regulations.
