GST Intelligence sources have reported that 258 persons, including eight chartered accountants (CAs), have so far been arrested in the nationwide drive against fake GST invoice frauds. The arrests have all been made in the last two and a half months, specifically in the period since mid-November, 2020.
According to sources at the Directorate General of GST Intelligence (DGGI), North Zone, Gurugram, the eighth CA was arrested, along with four of his business accomplices, yesterday in Jaipur. They had been operating 25 fake firms to fraudulently avail and pass on ITC through bogus invoices without any actual supplies of goods and services.
The list of CAs, arrested in the multi-layered fake GST invoice frauds via multiple bogus firms are:
CA BS Gupta (Jaipur)
CA Daulat S Mehta and CA Chandra Prakash Pandey (Mumbai)
CA Lalit Prajapati (Ahmedabad),
CA S Krishnakumar (Chennai)
CA Nitin Jain (Delhi)
CA B. Srinvasa Rao (Hyderabad)
CA Ankur Garg (Ludhiana)
According to GST Intelligence, all of the above were operating multiple non-existent firms and fake entities to dupe the exchequer with fraudulent ITC utilisation in connivance with fraudsters and fly-by-night operators.
Of the 258 arrested so far, at least two persons have also been booked under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).
The drive by the GST Intelligence and CGST authorities is currently ongoing with more than 2,500 cases booked against 8,000 fake GSTIN entities as of now. Authorities have also recovered more than Rs 820 crore from these fraudsters.
The chartered accountants’ regulatory body, namely, the Institute of Chartered Accountants of India (ICAI) has also been informed about these arrests and have been asked to take appropriate actions as per their own rules.
The GST intelligence authorities managed to pinpoint those indulged in tax evasion through various means including fake bills and also those availing these bills through layers of intermediaries.
Such a method of investigation could only be followed due to complete data sharing among GST, customs and income tax, and apt use of data analytics and AI & ML, sources at the Department of Revenue (DoR) informed.
It is with measures such as these that the DGGI has not only been able to unearth the fake firms but also the final beneficiaries of ITC frauds, like in the alleged ITC scam in manpower services by big companies like Swiggy, the food delivery chain and Instakart, a subsidiary of e-com giant Flipkart.
On the other hand, the nationwide drive against bogus GST invoice fraud has ensured better GST compliance to identify tax evaders and those availing input tax credits fraudulently.
As a consequence, record GST collection in December, 2020 was registered, to the tune of more than Rs.1.15 lakh crore. This has also resulted in an increase in the number of GSTR 3B return filers to more than 87 lakh in the month of December.