How Was a GST Fraud Worth Rs 7.85 Crore Exposed in South Delhi?

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How Was a GST Fraud Worth Rs 7.85 Crore Exposed in South Delhi?

Synopsis

A significant GST fraud worth Rs 7.85 crore has been uncovered in South Delhi, involving a chartered accountant's fraudulent input tax credit claims. The CGST's meticulous investigation exposed a network of circular trading and credential misuse, leading to the accountant's arrest, marking a crucial step in combating financial crime.

Key Takeaways

  • Rs 7.85 crore fraud exposed by CGST team
  • Arrest of a chartered accountant in South Delhi
  • Misuse of over 80 GSTINs identified
  • Ongoing investigation to uncover full extent of fraud
  • Emphasis on accountability within GST framework

New Delhi, May 8 (NationPress) In a significant operation, a Central Goods and Services Tax (CGST) team has exposed a large-scale fraud involving fraudulent input tax credit (ITC) claims totaling nearly Rs 7.85 crore, perpetrated by a chartered accountant based in South Delhi who has now been arrested, as announced on Thursday.

Investigations have revealed the misuse of over 80 GSTINs (Goods and Services Tax Identification Numbers), primarily in the Palam/Dwarka region, associated with the chartered accountant’s email addresses and contact numbers, according to a statement from the Finance Ministry.

A core group of 31 GSTINs involved in circular trading was identified, with no actual supply of goods or services taking place.

As per the ministry's statement, search operations were carried out at 12 locations, uncovering multiple non-existent firms.

During these operations, various electronic devices pertinent to the investigation were confiscated, and statements from involved individuals were recorded, as reported by the ministry.

Numerous taxpayers admitted to depending solely on the chartered accountant for their GST filings, with login credentials and submissions centrally managed by him.

"The offences committed by the accused fall under section 132(1)(b) and 132(1)(c) of the CGST Act, 2017, which are cognizable and non-bailable under Section 132(5) and punishable under Section 132(1)(i) of the same Act," stated the Ministry.

"Thus, the chartered accountant was apprehended under Section 69(1) of the CGST Act, 2017, and was presented before the Duty Magistrate on 07.06.2025, who remanded him to judicial custody for 14 days until 21.05.2025," it added.

This incident underscores a systemic exploitation of the GST framework through impersonation, credential misuse, and collusive circular trading.

The Finance Ministry also indicated that investigations are ongoing under the CGST Act, 2017, to fully uncover the extent of the fraud and to identify all beneficiaries of the ineligible input tax credit.

Point of View

This case illustrates the ongoing challenges faced by tax authorities in combating fraud within the GST framework. It emphasizes the necessity for stringent measures to safeguard the integrity of tax systems, ensuring that responsible entities are held accountable while protecting genuine taxpayers.
NationPress
26/07/2025

Frequently Asked Questions

What is the GST fraud amount involved?
The GST fraud amounts to nearly Rs 7.85 crore, involving fraudulent input tax credit claims.
Who was arrested in connection with the fraud?
A chartered accountant based in South Delhi was arrested for orchestrating the fraudulent activities.
How many GSTINs were misused?
Over 80 GSTINs were misused in the fraudulent scheme.
What actions were taken by the authorities?
Search operations were conducted at 12 premises, revealing multiple non-existent firms and confiscating electronic devices related to the investigation.
What are the potential legal consequences for the accused?
The accused faces serious charges under the CGST Act, including non-bailable offences.