The Central Goods and Services Tax (CGST) department in Surat has unearthed a massive fake invoice racket worth ₹1,066 crore. Investigations have revealed fraudulent input tax credit (ITC) claims amounting to nearly ₹190 crore.
According to CGST officials, the racket involved the creation of multiple shell companies with no actual business activities. These entities were set up solely to generate fake invoices and pass on illegitimate tax credits to other firms.
The scam came to light following coordinated raids conducted by CGST officials at various premises in Surat. Acting on specific intelligence, the department seized incriminating documents, including bogus invoices, company seals, and other objectionable records during the searches.
Authorities disclosed that the fraudulent network had deep links within the bullion market and real estate sector, raising concerns about large-scale tax evasion and possible money laundering. “This racket was not just about issuing fake invoices—it had wider ramifications on the economy, including illegal fund flow in bullion and property transactions,” an investigating officer said.
Two masterminds behind the racket have been arrested, while the search for a third director allegedly involved in the fraud is ongoing. The CGST department has launched a comprehensive probe to identify all associates, beneficiaries, and linked entities connected to the scam.
Preliminary findings suggest that the group floated numerous shell companies with no genuine business operations. These entities existed only on paper and were used to claim fraudulent tax credits. The department is now scrutinizing the flow of invoices, the involvement of intermediaries, and possible connections with other states.
Officials have confirmed that the investigation is still in its early stages and more arrests could follow.
This crackdown marks one of the largest actions taken by CGST Surat in recent years and underscores the department’s commitment to tackling tax frauds that cause significant revenue losses to the exchequer.
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