The Delhi government's Department of Trade and Taxes uncovered a Rs 14 crore GST refund fraud, police said on Sunday. One of the key accused has been arrested in the case.
The investigation revealed a network of individuals who had created and operated four fictitious firms solely to illegitimately claim GST refunds under the guise of genuine business activities, they added.They claimed that this was a first-of-its-kind operation by the department, where cutting-edge big data analytics and detailed chain analysis, including scrutiny of banking transactions, were employed to trace the flow of funds across multiple entities located within Delhi, other states, and even international jurisdictions such as Hong Kong and Singapore.
The department's data-led investigation identified multiple entities using the same PAN, mobile numbers and email addresses as those used by the fraudulent firms, an official said.The registration of Delhi-based entities has been suspended while information has been shared with jurisdictional authorities in other states for further action against entities operating in their areas.
In coordination with the Income Tax Department, the department has also flagged and recommended the blocking of PANs associated with the fraudulent activities, thereby restricting further misuse, the official said.As money has been traced out to entities located outside India, a detailed report is also being submitted to the Department of Revenue, Government of India, for necessary action.
Swift recovery efforts were launched following the detection of the fraud. So far, Rs 1.16 crore has been successfully recovered, and ongoing proceedings are underway to retrieve the remaining amount, he said.The department has also frozen 45 bank accounts linked to 27 implicated entities, effectively preventing further movement or diversion of illegal funds, he added.
An FIR has been lodged with the Economic Offences Wing (EOW) of the Delhi Police. In a significant development, one of the key accused, the proprietor of one of the fraudulent firms, has been arrested from Delhi. He was produced before the Metropolitan Magistrate's Court, where police custody was granted. Further arrests are anticipated as investigations continue, he said.A senior official from the Delhi GST Department stated, "This decisive action reaffirms our zero-tolerance approach to GST fraud. Such offences not only drain public resources but also place an unfair burden on honest taxpayers.
"The department remains resolutely committed to protecting the integrity of the GST system and will continue to pursue all forms of tax evasion with full legal force," he added.
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