A specific intelligence was developed by the officers of Delhi South CGST Commissionerate concerning certain bogus firms that were created solely for the purpose of generating fake invoices and passing ineligible input tax credit along the chain.

Searches and inspections were conducted across locations spread across Delhi, unearthing a cartel running 54 bogus firms registered in Delhi –NCR region that were engaged in fake invoicing and circular trading. Incriminating documents such as rubber stamps and letter heads of various firms, mobile phones, laptops etc. have been seized from the search premises.

Preliminary enquiry conducted so far into these transactions has revealed fake invoicing of around ₹ 611 crores and tax evasion of over ₹ 38.5 crores. The members of cartel in their Confessional statements have accepted their roles in managing these bogus firms.

The persons behind these bogus firms hatched the conspiracy to defraud the government and committed offences specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and nonbailable.  Three key persons of the cartel namely Sh. Ankit Gupta, the mastermind managing these bogus firms and two of his accomplice Sh. Rabiendra Singh and Sh. Rajendra Singh has been arrested on 23.02.2022. The accused were produced before the Duty Magistrate following which they have been remanded to judicial custody for 14 days.

Further investigation is under progress.

Fake invoicing and input tax credit fraud exposed, leading to arrests under CGST Act and ongoing investigation. Investigation uncovered a coordinated fake invoicing and circular trading scheme operated through 54 bogus firms to generate illegitimate invoices and pass ineligible input tax credit; searches seized documentary and electronic evidence and preliminary enquiry attributes fake invoicing of approximately Rs. 611 crores and alleged tax evasion of over Rs. 38.5 crores. The cartel members have given confessional statements, and the accused are alleged to have committed offences under section 132(1)(b) and section 132(1)(c) of the CGST Act, 2017; three key persons have been arrested and remanded to judicial custody while investigation continues.