In a major crackdown on tax evasion, the CGST department has unearthed a massive GST fraud of over Rs 100 crore, operated through a network of fake companies from a single shop located in a Faridabad mall. The fraud, involving fictitious scrap trading and fraudulent input tax credit (ITC) claims, was allegedly orchestrated by Gaurav Jain, a commerce graduate from Faridabad.
The scam came to light after the CGST commissionerate in Gurgaon utilized advanced data analytics to identify suspicious transaction patterns. Officials noticed unusually high volumes of trade - worth hundreds of crores - being reported by multiple companies registered at the same retail address. All firms were shown to be scrap dealers, but investigations revealed they existed only on paper with no physical inventory or warehousing facilities.
"The high volume of transactions from a single retail outlet raised several red flags. Upon further investigation, it became evident that the accused was linked to 24 other shell companies," a senior GST official stated.
Following a detailed probe, CGST officers conducted coordinated raids at five different locations in Faridabad on Thursday. The investigation revealed that fake invoices amounting to Rs 101 crore had been issued, resulting in fraudulent GST claims worth Rs 15.6 crore. These fake firms were registered under the jurisdiction of GST Gurgaon.
The alleged mastermind, Gaurav Jain, was arrested on Friday under Section 69(1) of the CGST Act. He was found to be operating nine active shell companies directly from the mall-based shop and is suspected to be involved with several others used for generating bogus invoices and passing on fake input tax credit.
The authorities are now expanding their investigation to identify other potential beneficiaries and collaborators in the network. This case underscores the government's increasing reliance on data-driven intelligence to clamp down on GST fraud and tax evasion.
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