Investigations reveal misuse of over 80 GSTINs with a core group of 31 GSTINs engaged in circular trading, with no actual supply of goods or services

In a major crackdown on Goods and Service Tax (GST) fraud, the CGST Delhi South Commissionerate has uncovered a fraud on a large-scale involving fraudulent Input Tax Credit (ITC) claims amounting to Rs. 7.85 crore (approx.) by a South Delhi based Chartered Accountant.

Investigations revealed misuse of over 80 GSTINs (Goods and Services Tax Identification Numbers), mainly in the Palam/Dwarka area, linked to the Chartered Accountant’s email IDs and contact numbers. A core group of 31 GSTINs engaged in circular trading was identified, with no actual supply of goods or services.

Search proceedings were conducted at 12 premises and multiple firms were found non-existent. During searches, several electronic devices relevant to investigation were seized, and statements of the relevant people were recorded. Multiple taxpayers admitted to have been relying entirely on the Chartered Accountant for GST filings, with login credentials and filings centrally controlled by him.

The offences committed by the accused are covered u/s 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which is cognizable and non-bailable offence under Section 132(5) and punishable under Section 132(1)(i) of the Act ibid. Accordingly, the said Chartered Accountant was arrested under Section 69(1) of the CGST Act, 2017 and produced before Duty Magistrate on 07.06.2025 who remanded him to judicial custody for 14 days till 21.05.2025.

The case highlights a systemic abuse of the GST framework through impersonation, credential misuse, and collusive circular trading. Investigations are ongoing under CGST Act, 2017 to uncover the full scale of the fraud and identify all beneficiaries of the ineligible Input tax credit.

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NB/KMN

GST Input Tax Credit fraud uncovered, revealing circular trading and credential misuse prompting arrest and ongoing statutory investigation. Investigations revealed a network of over eighty GSTINs, including a core group of thirty-one engaging in circular trading with no real supplies, linked to a Chartered Accountant who centralised login credentials and filings; searches seized electronic devices, uncovered non-existent firms, and led to arrest under the CGST Act, 2017 while inquiries continue to identify beneficiaries of ineligible Input Tax Credit.