Did DGGI Discover 6 Shell Companies in Delhi with Fraudulent GST Invoices Worth Rs 266 Crore?
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Synopsis
In a significant crackdown, the DGGI has unearthed a web of fraudulent activities involving six shell companies in Delhi, with fraudulent GST invoices amounting to Rs 266 crore. This operation raises serious concerns for innocent investors and highlights the ongoing battle against financial misconduct in the country.
Key Takeaways
- The DGGI discovered fraudulent GST invoices worth over Rs 266 crore.
- Six shell companies were involved in the scheme.
- Fraudulent Input Tax Credit (ITC) of Rs 48 crore was passed on.
- The principal mastermind was a chartered accountant.
- Original documents were seized during the raids.
New Delhi, July 11 (NationPress) The Directorate General of GST Intelligence, Bengaluru Zonal Unit, has revealed fraudulent invoices exceeding Rs 266 crore following a raid in Delhi. This operation involved the dubious availment and transfer of fraudulent Input Tax Credit (ITC) totaling Rs 48 crore via shell companies, an official announcement stated on Friday.
The Union Finance Ministry highlighted that this investigation stemmed from a prior case initiated in Bengaluru, leading DGGI officers to conduct searches across more than six locations in Delhi, ultimately uncovering fraudulent invoices amounting to over Rs 266 crore.
The individuals behind this scheme established shell companies devoid of any genuine business activities, engaged in circular trading to artificially boost turnover, and even listed one of these companies on the stock exchange while committing ITC fraud, according to the official statement.
Evidence from the investigation showed that four of these companies, lacking business operations, claimed to have received hundreds of crores worth of goods and services.
It was further revealed that the principal mastermind was a chartered accountant/statutory auditor who orchestrated the transactions involving these companies.
Moreover, the investigation uncovered that the structure and shareholding patterns of these entities changed over time, with the CA/statutory auditor serving as a director in several of these shell companies, thereby establishing a clear connection to the origins of the six shell companies.
“During searches at the locations of these companies, original documents, including invoices and seals, were discovered at the mastermind's premises. The key perpetrator of this case has been apprehended,” stated the ministry.
The DGGI Bengaluru Zonal Unit has embarked on a thorough investigation into this fraud, which poses risks for unsuspecting investors in listed firms.
Having identified these patterns of GST fraud involving circular trading and fictitious ITC by listed companies, DGGI has provided targeted information to SEBI recently to prompt action under the SEBI Act, according to the ministry.
Point of View
I stand firmly with our commitment to uncovering the truth behind financial misconduct. The recent findings by the DGGI highlight a persistent issue in our economy that requires vigilance and action. We must ensure that such fraudulent schemes are eradicated to protect the interests of honest investors and maintain the integrity of our financial systems.
NationPress
22/07/2025
Frequently Asked Questions
What triggered the DGGI's investigation?
The investigation was initiated as a follow-up to a case started in Bengaluru, leading to the discovery of fraudulent invoices in Delhi.
How much fraudulent GST was involved?
The fraud involved fraudulent Input Tax Credit (ITC) amounting to Rs 48 crore from the shell companies.
What actions have been taken against the masterminds?
The key mastermind of this fraud has been arrested, and original documents were seized during the searches.
What are the implications of this fraud?
This fraud poses risks to innocent investors in listed companies, prompting DGGI to share information with SEBI for further action.
What were the findings during the raids?
The raids uncovered documents and evidence of circular trading and inflated turnover among shell companies.
