Over ₹5000 crore GST fraud detected on Delhi

Goods and Services Tax (GST) officials have unearthed a Delhi-based racket involving five companies and arrested one person as part of a drive against tax evasion using fake invoices. With this case, the authorities have so far made 40 arrests in various cases of GST fraud from the Delhi zone involving tax evasion of  ₹5,310 crore. In the latest case, the five companies used to issue invoices without any actual supply of goods and passed on inadmissible tax credit of around  ₹94 crore. 

Since mid-November, GST authorities have been on a tax compliance enforcement drive based on red flags raised in the GST reporting system. The seamless chain of tax credits and the requirement for reporting transactions at every stage in the supply chain makes it easier for the authorities to identify wrongdoers with accuracy.

In the case of the racket unearthed on Thursday, searches showed incriminating documents, signed cheques and stamps of dummy firms were recovered. In the meanwhile, the authorities arrested six others from Maharashtra for allegedly running 15 fake entities that dealt in fake input tax credits. Officials detected fictitious transactions of over ₹3000 crore in this case.

The compliance drive and stricter rules on use of tax credits have helped the government to report year-on-year growth in GST receipts since last September in spite of the stress in the economy.

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