Drive against GST fraud: 12 arrested, including CA

By: |
February 24, 2021 8:45 AM

The Directorate General of GST Intelligence (DGGI) and the C-GST Commissionerates arrested 12 persons including a chartered accountant on Tuesday in connection with fake-invoices frauds.

arrest, GST fraudThe chartered accountant arrested, one Abhishek Singhal, was involved in running fake firms to issue fraudulent invoices.

The Directorate General of GST Intelligence (DGGI) and the C-GST Commissionerates arrested 12 persons including a chartered accountant on Tuesday in connection with fake-invoices frauds. The authorities have stepped up the drive against such frauds since mid-November last year and this, along with the use of data analytics to detect tax evasion, has resulted in a sharp increases in GST collections.

GST collections came in at an impressive Rs 1.15 lakh crore in December 2020 and rose further to Rs 1.20 lakh crore in January 2021. The tax department expects similar higher collection trend to continue in the month of February 2021 as well.

The chartered accountant arrested, one Abhishek Singhal, was involved in running fake firms to issue fraudulent invoices. He is the 10th CA arrested so far who have been involved in bogus firms and/or issuance of fake invoices to fraudulently avail and pass on ITC without actual supplies of goods/services. Sources said that out of the 329 persons arrested so far, at least four persons have been booked under Cofeposa while the GST intelligence and CGST authorities have booked more than 3,200 cases against 9600 fake GSTIN entities as of now. Also, the authorities have recovered more than Rs 1,000 crore from these fraudsters.

According to Sources, the GST authorities have been using deep data analytics, integrated data-sharing and AI & ML tools along with BIFA to unearth the input tax credit (ITC) utilisation frauds via fake invoicing and bogus firms. The technology has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and their networking without any overreach and able to pinpoint the fraudsters with specific inputs to take targeted actions and further investigations against them.

Of the 329 arrests so far there are 131 masterminds, 113 proprietors, 46 director/managing directors, 17 partners, 5 CEOs/CFOs/CMDs, 10 chartered accountants, 4 accountants and one each of company secretary, broker, and GST practitioner.

Arrested persons include fake entities operators and the end beneficiaries who connive with these fraudsters running businesses of fake invoices.

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