Home / News / India /  GST watchdog detects invoice fraud to the tune of 7,600 crore

NEW DELHI : The Directorate General of GST Intelligence (DGGSTI), an arm of the indirect tax administration, has unearthed a racket involving 90 firms which issue fake invoices to errant companies for tax evasion, the agency said on Friday.

DGGSTI said a resident of Sirsa in Haryana, who was running the racket, has been arrested and produced before a local court. He was sent to 14 days judicial custody.

The agency has found that the accused had set up 90 fake firms to issue bogus invoices, without actually supplying goods. Issuing bogus invoices has been a practice among tax evaders and money launderers for a long time.

This was flagged by a special investigation team on black money, led by former Supreme Court judge M.B. Shah, in 2015.

The companies involved in the scam exist only on paper and offer what is referred to as “accommodation entries", or bogus transactions without commercial substance. These are used by other firms to either wrongly claim input tax credit, or to inflate costs to evade income tax.

DGGSTI said it has unearthed 110 debit or credit cards of individuals and blank cheque books linked to 173 bank accounts from the Delhi residence of the accused.

Fake invoices of over 7,600 crore with a GST component of 600 crore have been detected in the current case.The indirect tax administration is now using technology and data analysis to identify tax evaders and is closely working with the income tax department for leads.

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