DGGI Jaipur busts Delhi-based Rs 1,047-crore GST scam

The Jaipur Zonal Unit of the Directorate General of GST Intelligence (DGGI) has busted a major crime syndicate based in Delhi.

This syndicate was operating 569 fake firms in 14 states, an official press release said, adding that through these firms it created huge fraudulent input tax credit (ITC) of Rs 1,047 crore. The mastermind is a 30-year-old Delhi resident, Rishabh Jain, who had hired 10 employees for operating these fake firms.

“After extensive recce and data analytics, the officials of DGGI, Jaipur were able to trace this mastermind in Delhi and nabbed him,” the release said.

The modus operandi indicates that the syndicate has a close nexus with various brokers to purchase SIM cards, manage their bank accounts, RTGS and cash transfers, and mediate between them and beneficiary firms. There are brokers and agents specializing in registering firms on GSTN, using IDs of poor, needy and susceptible people and selling these registered firms to syndicates, which further issue fake invoices through them, the release said.

This syndicate has issued invoices with a taxable turnover of Rs 6,022 crore involving ITC of Rs 1,047 crore through these 569 fake firms to more than 2,000 beneficiary firms. A majority of the fake firms are located in Delhi with presence in 13 other states of Rajasthan, Uttar Pradesh, Punjab, Bihar, Jharkhand, Gujarat, Maharashtra, Haryana, West Bengal, Karnataka, Goa, Assam, and Uttarakhand.

So far, 73 bank accounts used by syndicate and brokers have been attached.

Jain was arrested yesterday and produced before the Economic Offence Court, Jaipur. He has been remanded for judicial custody till July 7.

The DGGI Jaipur Zonal Unit detected 142 fake ITC cases during 2022-23, involving Rs 1,327 crore, in which 9 persons were arrested. This fiscal, in less than three months, five fake ITC cases involving Rs 1,531 crore were booked with the arrest of five masterminds.