The Directorate General of GST Intelligence (DGGI) in Bengaluru has unearthed a significant GST scam worth Rs. 3,200 crore and arrested two people in this regard. The probe was led by the DGGI's Bengaluru zonal unit, which found a well-planned racket of fake companies, bogus transactions, and circular trading of invoices.
There existed 15 dummy companies in this fake network with no genuine commercial activity, and these dummy companies submitted fake inward supplies worth hundreds of crores. They created false invoices in respect of service transactions, namely, IT support, advertising, and management consultancy. Meanwhile, their goods had not reached anyone's doorstep. In the wake of this kind of transaction, they managed to garner false Input Tax Credit worth Rs. 665 crore and consequently increased the turnover of those firms, thus changing the share price.
Despite the fact that companies issued large numbers of inward e-way bills, no outward e-way bill was issued by any of the companies. Nine of them were also listed on Indian stock exchanges. The accused manipulated the stock exchange in this regard. Further, they filed GST returns from common IP addresses, revealing the same individuals were running all such companies.
The searches made at more than 30 locations in Bengaluru and Mumbai brought out important financial documents that would establish the scale of the scam. This also gullied the public in this scam due to inflated share prices and tremendous financial losses caused to investors.
The DGGI continues to investigate the case, with the third accused absconding. Authorities are pursuing a detailed investigation by the illegal activities of these fraudulent entities, since this fraud deals with such an enormous amount.