According to reports, the CGST Delhi West Commissionerate has made significant progress in combating financial malpractices by dismantling a network of over 30 fake firms. This operation sheds light on the depth of GST fraud prevailing in the region. As part of a specialized drive to tackle fraudulent registrations, the CGST Delhi West Commissionerate launched an investigation into a suspicious entity, which led to the discovery of multiple firms registered under the same address.

Further examination revealed that although the address was valid, the property owner disavowed any knowledge of the registered firms. Additionally, there was no evidence of goods movement from the location, indicating potentially fraudulent activities. Employing data analytics, authorities conducted searches at various sites in Delhi, ultimately uncovering an individual named Shiva.

Shiva had employed deceptive tactics to acquire Know Your Customer (KYC) credentials from unsuspecting individuals, promising to assist them with loan approvals. However, he misused their information for illegitimate purposes. It was discovered that Shiva had established more than 30 fake firms using the obtained credentials, which he then sold for monetary gains. To evade physical verification processes, he manipulated AADHAR authentication to secure fraudulent GST registrations.

The operation of these fraudulent firms resulted in the illicit transaction availing and passing on of ineligible Input Tax Credits (ITC), amounting to over 50 crores. This blatant violation of Section 132 of the CGST Act, 2017 led to the arrest of Shiva. He is currently in judicial custody, while investigations continue.

This case underscores the prevalence of fraudulent practices in the financial sector and highlights the vital role played by investigative bodies like the CGST Delhi West Commissionerate. The effective use of data analytics to expose such fraudulent operations demonstrates a proactive approach towards ensuring financial integrity. As the investigation progresses, it is crucial to sustain these efforts in order to uphold transparency and accountability within the financial ecosystem.

Image source: Studycafe