Recently, the Gurugram Zonal Unit of Directorate General of GST Intelligence have unearthed a major fraudulent Input tax Credit (ITC) racket involving 461 shell/fake entities, which had passed on fraudulent ITC of Rs. 863 crore. In this matter till date, two key operatives have been arrested.

This racket of passing on of fraudulent ITC through fake shell entities was detected, when based on intelligence a search was carried out at a secret office being operated for this purpose. Huge number of forged/ morphed/ fake soft copies of documents like rent agreements, electricity bills, aadhar card, driving license, PAN card, etc. were detected in the laptops resumed from this secret office, which were used to create and operate their fake entities. The forensic examination of the laptops, devices seized from this office led to the eventual detection of ITC fraud to the tune of Rs. 863 crore involving fake 461 entities and arrest of two key operatives. Initial investigations indicates that the fraudulent ITC credit has eventually travelled to the highly evasion prone metal/iron & steel sector.

Fraudulent input tax credit scheme using shell entities detected, arrests made and seizures followed after digital forensic analysis Forensic analysis of seized digital devices and documents uncovered creation and operation of a network of shell entities using forged identity and business records to generate and transfer fraudulent Input Tax Credit, tracing the illegitimate credit flows into the metal/iron and steel sector and prompting arrests and an ongoing criminal investigation.