New Delhi, February 28, 2024 – In a major operation, officers from the Jaipur Zonal Unit of the Directorate General of GST Intelligence (DGGI) have uncovered a fraudulent syndicate led by Rishabh Jain, a 30-year-old from Delhi. Jain was arrested for masterminding a massive GST fraud involving 569 fake companies. These companies were used to create fraudulent invoices with a taxable turnover of Rs 6,022 crore, resulting in the unlawful claiming of an input tax credit (ITC) worth Rs 1,047 crore.
The syndicate, mostly operating in Delhi, also spread across 13 other states, including Rajasthan, Uttar Pradesh, Bihar, and Gujarat. Through these fake companies, Jain and his team created a network of fraudulent financial transactions aimed at misleading the tax authorities.
According to the Ministry of Finance, after conducting extensive surveillance and data analysis, the DGGI Jaipur team managed to track down and arrest Jain. Jain had hired 10 employees to help operate these fake firms. The operation involved the purchase of companies, bank accounts, and SIM cards, as well as managing Real Time Gross Settlement (RTGS) transfers and cash transactions.
The syndicate relied heavily on brokers who specialized in registering companies on the GST Network (GSTN) using the identities of impoverished and vulnerable individuals. These companies were later sold to the syndicates, who would use them to issue fraudulent invoices, leading to huge ITC claims.
So far, authorities have frozen 73 bank accounts associated with these fake companies and the brokers involved in this scheme. In the fiscal year 2022-23, the DGGI’s Jaipur unit uncovered 142 cases of fake ITC claims involving a total of Rs 1,327 crore. The current year has already seen five new fake ITC cases amounting to Rs 1,531 crore.
The DGGI has emphasized its commitment to preventing such fraudulent activities in the future and bringing the masterminds behind these crimes to justice. Over the past week alone, the Jaipur Zonal Unit has successfully uncovered two other large syndicates involved in similar frauds.