The Department of Trade and Taxes, Government of Delhi, has unearthed a Rs 14 crore Goods and Services Tax (GST) refund fraud. Authorities have arrested a key suspect - the proprietor of one of the fictitious firms - and have so far recovered Rs 1.16 crore.
The investigation, aided by advanced data analytics and scrutiny of financial transactions, led to the freezing of 45 bank accounts linked to 27 entities involved in the fraud. An FIR has been registered with the Economic Offences Wing (EOW) to initiate further legal action.
According to a senior official, the fraudsters created and operated four fake firms to illegally claim GST refunds by simulating genuine business operations. The department traced the fraudulent transactions through a complex web of entities spread across Delhi, other Indian states, and even international locations such as Hong Kong and Singapore.
"Common PANs, mobile numbers and email IDs were used across multiple entities to manipulate the GST system," the official said. "We've suspended registrations of implicated Delhi-based firms and flagged the relevant PANs for blocking in coordination with the Income Tax Department."
Authorities have also shared the findings with other state jurisdictions to curb similar frauds and prevent future refund abuse.
The bust highlights the growing sophistication of tax evasion tactics and the government's evolving technological response to safeguard revenue.
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