A significant GST fraud involving ₹718 crore in fake invoices has been uncovered in Delhi, revealing that transactions were purely on paper.
The probe, which was later handed over to the Anti-Corruption Bureau ( ACB ), uncovered a scheme where a rogue tax officer, alongside three lawyers and several others, orchestrated the swindling of ₹54 crore from the Goods and Services Tax ( GST ) Department, reported NDTV.
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A GST officer, three lawyers, two transporters, and a fake company owner were behind a plot involving 500 fictitious companies. These companies generated fraudulent invoices amounting to ₹718 crore, allowing them to claim ₹54 crore in GST refunds. These firms only existed on paper, allegedly engaging in the import/export of medical goods to secure the fraudulent refunds.
Babita Sharma, the GST Officer ( GSTO ), masterminded the scheme by creating 96 fake firms and approving over 400 refunds totaling ₹35.51 crore between 2021 and 2022. Initially, only refunds worth ₹7 lakh were approved, but the amount skyrocketed soon after. Notably, Ms. Sharma facilitated these refunds within just three days of application. Upon her transfer to Ward 22 in 2021, over 50 firms applied for migration to her ward, raising suspicions that led to the GST Vigilance Department’s investigation, eventually uncovering the fraud rooted within the GST office itself.
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The fake firms generated invoices worth ₹718 crore, reflecting non-existent purchases. The probe, later taken over by the ACB, revealed that the GSTO issued refunds without proper verification of invoices or Input Tax Credit ( ITC ). Many firms initially supplied goods, but no records existed later. In 15 cases, neither Aadhaar Card verification nor physical verification of the firms was conducted, as required by GST registration rules. Of the 53 firms that migrated to Ward 22 after Ms. Sharma’s transfer, 48 received GST refunds totaling ₹12.32 crore.
The investigation further revealed that GST refunds were deposited into the bank accounts of three lawyers—Rajat, Mukesh, and Narendra Saini—and their family members. The ACB uncovered 1,000 bank accounts linked to the fake firms, their family members, and employees. The trio managed 23 firms using a single email ID and mobile number, with five firms sharing the same PAN number and email ID, creating multiple GST registration numbers.
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One of the arrested individuals, Manoj Goyal, was a fake firm owner, while Surjeet Singh and Lalit Kumar, two transporters, were also taken into custody. The ACB reported that forged e-way bills and receipts for carrying goods were generated to claim GST refunds, with the transporters receiving payments for providing these fraudulent documents without offering any actual services.
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