The Directorate General of GST Intelligence (DGGI), Regional Unit, Dehradun—under the jurisdiction of the Directorate General of GST Intelligence (Meerut Zonal Unit)—has dismantled a highly organized syndicate engaged in generating and passing fake Input Tax Credit (ITC) through a nationwide web of shell entities.
The investigation revealed bogus invoicing of approximately ₹2,150 crore, with fake ITC of nearly Rs. 300 crore being fraudulently generated and circulated across multiple entities. The racket, however, went far beyond mere tax evasion. It evolved into a sophisticated scheme to siphon funds directly from the government exchequer through fraudulent export refund claims.
Fraudulent Refunds Claimed via Andaman & Nicobar Registrations
According to officials, the masterminds strategically exploited GST registrations in locations outside mainland India—particularly in the Andaman & Nicobar Islands—to lend credibility to fake export transactions and claim GST refunds. Using this route, the syndicate allegedly secured fraudulent refunds amounting to approximately ₹17 crore.
The illicit proceeds were layered through multiple mule bank accounts to obscure the money trail. Authorities believe the remote location registrations were deliberately chosen to avoid early detection and to create a façade of genuine export activity.
Web of Shell Companies and Dummy Identities
The investigation uncovered a complex network of shell companies spread across various parts of the country. These entities were used to generate fake supply chains, issue bogus invoices, and circulate ineligible ITC credits.
Based on intelligence inputs, DGGI officers conducted search operations in the Delhi region on Thursday, February 12. During the raids, officials seized a substantial cache of incriminating material, including:
- Multiple debit and credit cards
- Cheque books
- SIM cards
- Mobile phones and laptops
- Company stamps
- Digital storage devices
These financial instruments were reportedly obtained and operated in the names of dummy individuals to facilitate and conceal fraudulent transactions.
Arrest of Key Masterminds
Three alleged masterminds of the syndicate were apprehended during the operation. They were produced before the Court of the Chief Judicial Magistrate (CJM), Meerut, on February 13, 2025. The Judicial Magistrate subsequently remanded all three accused to judicial custody.
Officials indicated that further investigation is underway to identify additional beneficiaries and entities involved in the fake ITC chain and refund claims.
Deliberate Abuse of GST Export Mechanism
Authorities described the case as a calculated and well-planned attempt to misuse the GST framework under the guise of export transactions. By fabricating supply chains and claiming fraudulent export refunds, the accused effectively attempted to siphon public funds directly from the Government of India.
The case highlights a worrying trend where fake ITC fraud is coupled with fraudulent refund claims, transforming tax evasion into direct extraction of government revenue.
Data Analytics and Digital Forensics at the Core
The department emphasized that advanced data analytics, risk profiling, and digital forensic tools played a critical role in unearthing the fraud. Increasing inter-state data matching and transaction tracking enabled investigators to detect irregular patterns in registrations and refund claims.
Officials reiterated that strict action will be taken against all individuals and entities involved in such frauds to protect public revenue and maintain the integrity of the GST ecosystem.
The bust underscores the government’s intensified enforcement drive against fake ITC rackets and export refund scams, particularly those exploiting geographically remote registrations to evade scrutiny.
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