The government has arrested 12 persons, including one chartered accountant (CA) and a woman for claiming input tax credit under the Goods and Services Tax (GST) through fake invoices, an official working in the department of revenue (DoR) said.
“The Directorate General of GST Intelligence (DGGI) and Central GST Commissionerate have arrested 12 persons in a single day including a CA and a lady. The CA was involved in running fake firms to issue fraudulent invoices,” the official said requesting anonymity. DoR is an arm of the Union finance ministry.
The CA is the tenth professional arrested so far in the ongoing nationwide drive against fake GST invoice frauds since mid-November, 2020, he said. So far, the government has arrested 329 persons for GST evasion.
Among the 329 arrested persons, four are have been booked under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) while the GST intelligence and CGST authorities have booked more than 3,200 cases against 9,600 fake GST-registered entities, he said.
“Also, the authorities have recovered more than ₹1,000 crore from these fraudsters,” he said. GST authorities have been using data analytics, integrated data-sharing and artificial intelligence (AI) tools to unearth the input tax credit (ITC) frauds via fake invoicing and bogus firms, he added.
The technology has enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities and their networking without any overreach and able to pinpoint the fraudsters with specific inputs to take targeted actions and further investigations against them.
The nationwide drive against fake GST invoice frauds have led to record collections of ₹1.15 lakh crore in December 2020 and ₹1.20 lakh crore in January 2021, he said.
The arrested CA was involved in three fake firms which were generating goods-less invoices of miscellaneous commodities, he said. The central GST Jaipur Zone had arrested him.
“He did not co-operate with authorities during investigations, following which a charge sheet was filed against him in the Economic Offence Court where he surrendered later and was sent to judicial custody,” he added.
Out of the 329 arrests so far. there are 131 masterminds, 113 proprietors, 46 directors, 17 partners, 5 CEOs, 10 CAs, four accountants and one company secretary, one broker, and a GST practitioner. Arrested persons include fake entities operators and the end beneficiaries who connive with these fraudsters running businesses of fake invoices.