DGGI Bengaluru Busts Rs. 266 Crore GST Fraud, Arrests Mastermind
Bengaluru: The Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit, has uncovered a major Goods and Services Tax (GST) fraud involving six shell companies issuing fraudulent invoices worth Rs. 266 crore and fraudulently claiming Rs. 48 crore in Input Tax Credit (ITC), with the key mastermind arrested. Searches conducted across over six premises in Delhi revealed a sophisticated scheme threatening financial transparency and investor trust.
In a follow-up operation linked to an investigation initiated in Bengaluru, DGGI officers found that the shell companies, with no actual business activity, engaged in circular trading to inflate turnover. One of these companies was listed on a stock exchange, amplifying the fraud’s impact. The investigation revealed that four companies falsely showed receipt of goods and services worth hundreds of crores, enabling the fraudulent ITC claims.
Further investigation identified a Chartered Accountant (CA), who served as the statutory auditor and, at times, a director in some of these shell companies, as the key mastermind managing the transactions. During searches at the premises of these companies, original documents, including invoices and seals, were found at the mastermind’s location, clearly establishing their role in orchestrating the fraud. The CA has been arrested, marking a significant step in dismantling the scheme.
DGGI Bengaluru Zonal Unit has launched a comprehensive investigation into the fraud, which has implications for innocent investors in listed companies. The probe is examining the structure of entities and changes in shareholding patterns to uncover the full extent of the network behind the six shell companies.
Having identified a pattern of GST frauds involving circular trading and fake ITC by listed companies, DGGI has shared specific inputs with the Securities and Exchange Board of India (SEBI) for initiating action under the SEBI Act. The investigation aims to protect the integrity of India’s financial systems and ensure accountability for such fraudulent practices.
(Posted by PIB Delhi on July 11, 2025)
Suggested Headlines (within 60 characters):
- Rs. 266 Cr Fake Invoices Uncovered by DGGI, Mastermind Held
- DGGI Nabs CA in Rs. 48 Cr ITC Fraud Scheme
- Bengaluru DGGI Exposes Rs. 266 Cr Shell Firm Scam
- DGGI Busts Rs. 48 Cr ITC Fraud, Arrests Mastermind
