The Directorate General of GST Intelligence’s (DGGI) Jaipur Zonal Unit has arrested the mastermind of a multi-state tax fraud syndicate that operated 569 fake firms and created a fraudulent Input Tax Credit of Rs 1,047 crore. Rishabh Jain, the 30-year-old Delhi resident who masterminded the syndicate, was arrested on Sunday and remanded for judicial custody till July 7, 2023. The syndicate was based in the national capital and used 10 employees to operate the fake firms.
The Ministry of Finance has reported that the syndicate had a close nexus with brokers who helped purchase firms, bank accounts and SIM Cards, and mediate between them and beneficiary firms. There are brokers who specialize in registering firms on GSTN using the IDs of poor, needy and susceptible people and sell these registered firms to syndicates. These firms go on to issue fake invoices.
According to the DGGI, in 2022-23, 142 cases involving fake ITC were booked, totaling Rs 1,327 crore, resulting in the arrest of nine people. In 2023-24, five fake ITC cases involving Rs 1,531 crore have been booked, with the arrest of five masterminds.
This is not the first time the DGGI has made arrests in relation to fake ITC. Last week, two masterminds were arrested from Jaipur for running a fake ITC syndicate of Rs 320 crore.
The DGGI officials were able to trace down and arrest the mastermind in Delhi after extensive recce and data analytics. The Ministry of Finance has lauded their efforts and hopes to continue cracking down on such syndicates to maintain the integrity of the GST system.
It is essential to combat such frauds that pose a threat to the Indian economy. The DGGI’s efforts are crucial in this regard, as the GST system is the backbone of India’s indirect tax framework. The GST system was introduced to create a transparent and efficient indirect taxation system, and it is imperative to maintain its authenticity.
The crackdown on such fraud syndicates is a necessary step for ensuring a fair and transparent tax system, and it is commendable that the DGGI is taking strict actions against the offenders. With the arrest of the mastermind, the DGGI has displayed its unwavering commitment to tackling such frauds and maintaining the sanctity of the GST system.
