GST Fraud Uncovered: Fake Invoices and ITC Scandal Hits Rs 266 Crore

The Directorate General of GST Intelligence's Bengaluru zonal unit has unearthed a significant tax fraud operation reportedly involving fraudulent invoices worth Rs 266 crore. The deception facilitated the passing on of fake Input Tax Credit (ITC) amounting to Rs 48 crore by using shell companies.

Investigations revealed that four companies with no legitimate business activities created shell entities that displayed receipt of goods and services worth hundreds of crores. The key perpetrator, a chartered accountant, was uncovered as having directorial roles in these shell companies.

This discovery highlights the wider implications for innocent investors associated with listed companies involved in such schemes. The DGGI has collaborated with Sebi to counteract these patterns of misuse and ensure regulatory actions under the Sebi Act.

(With inputs from agencies.)