The Economic Offences Wing (EOW) has unearthed a massive Goods and Services Tax (GST) input tax credit (ITC) fraud worth Rs 130 crore, involving 23 fake firms and Rs 512 crore in fake invoices, according to officials.
The investigation, which originally began with a case of Rs 34 crore in fraudulent ITC claims linked to nine operational companies and four shell firms, has now expanded across Madhya Pradesh, Chhattisgarh, and Maharashtra.
A Fully Digitally Orchestrated Syndicate
According to EOW Director General Upendra Jain, the racket was "an organised GST scam syndicate" that used digitally coordinated operations-including fake bank accounts, email IDs, mobile numbers, and ITC claims-to defraud the government.
The alleged mastermind, NK Khare, also known as Vinod Kumar, has been arrested. Investigators say Khare has been orchestrating this scam since 2009, creating companies under the names of unsuspecting villagers to avoid detection.
Key Highlights of the GST Fraud
- Rs 130 crore in fraudulent GST ITC claimed
- 23 fake firms created using false identities
- Rs 512 crore worth of fake invoices generated
- No actual movement of goods-invoices were purely paper-based
- Fraud spread across multiple states
- Mastermind used names of rural individuals to set up fake entities
Khare allegedly registered four firms in the names of villagers and used forged documents to obtain GST registrations, bank accounts, and digital identities. Investigations have revealed that the scam operated without any real supply of goods or services-making it one of the largest paper-trail scams in recent years.
The EOW has seized crucial evidence, including computers, fake seals, and documents from multiple locations, and more arrests are likely as the probe continues.
Government's Crackdown on Fake ITC
This case adds to a growing list of GST frauds being tackled by enforcement agencies nationwide. The Central Board of Indirect Taxes and Customs (CBIC) has already intensified efforts to curb fake ITC claims and is working in tandem with state authorities for stricter GST compliance.
Officials confirmed that the EOW will expand its investigation to track the beneficiaries of these fraudulent transactions and recover the misused funds.
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