In a major crackdown on GST fraud, the Central GST Delhi South Commissionerate has arrested a South Delhi-based Chartered Accountant for orchestrating a massive Rs 7.85 crore Input Tax Credit (ITC) scam involving circular trading and fake firms. The CA has been remanded to judicial custody until May 21, 2025, following an order by the Duty Magistrate, the Ministry of Finance said in a statement.
The investigation revealed that over 80 GSTINs (Goods and Services Tax Identification Numbers)-primarily registered in the Palam and Dwarka areas-were linked to the CA's email addresses and phone numbers. A core network of 31 GSTINs was involved in circular trading, claiming fraudulent ITC without any actual supply of goods or services.
Search operations conducted across 12 locations led to the discovery that several firms were non-existent, exposing the depth of the fabricated business entities. Authorities also seized electronic devices and recorded key statements during the search.
Notably, several taxpayers confessed to outsourcing their GST compliance entirely to the accused CA, including handing over login credentials and control of GST filings, further pointing to a systemic abuse of the GST ecosystem.
"The case demonstrates large-scale misuse of the GST framework through impersonation, misuse of credentials, and collusive circular trading," the ministry noted. The investigation is ongoing under provisions of the CGST Act, 2017, with efforts underway to identify all beneficiaries of the fraudulent ITC claims.
This incident underscores the urgent need for businesses to exercise due diligence while outsourcing GST compliance and for continued vigilance by tax authorities to curb tax evasion.
Official Copy of the Press Release is as follows
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