215 held in two months in fake GST invoice fraud cases

GST Intelligence (DGGI) and the CGST Commissionerates have recovered more than Rs 700 crore and arrested 215 persons in the last two months in cases related to fake GST invoices that were used to illegally avail or pass on input tax credit (ITC).

GST intelligence authorities have registered about 2,200 cases and unearthed more than 6,600 fake GSTIN entities during this period, sources said.

The Directorate General of GST Intelligence (DGGI) and the CGST Commissionerates have so far arrested 215 persons, including six chartered accountants and one company secretary, and recovered more than Rs 700 crore from these fraudsters, sources said.

Those arrested not only include operators of fake entities but also the end beneficiaries who connive with these fraudsters running businesses of fake invoices on commission basis, sources said.

Use of data analytics, data-sharing and Artificial Intelligence (AI) along with BAFTA tool has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and pinpoint the fraudsters with precise input, sources said.

Those arrested include managing directors, directors, proprietors and partners of various business and trade entities who are either involved in availing and/or utilising the ineligible ITC fraudulently, they said.

To further tackle the menace of fake invoice frauds and mis-utilisation of ITC, sources said the government has acted on the recommendations of the Law Committee of GST Council and has placed qualified restrictions of 1 per cent on the use of ITC for tax liability in a manner that does not impact ease of doing business for genuine taxpayers.

So far, maximum arrests have been made in Mumbai zone with 23 persons.