In a significant action against GST evasion, the Central GST Commissionerate (Delhi South) has arrested a Chartered Accountant from South Delhi for his alleged involvement in a ₹7.85 crore Input Tax Credit (ITC) fraud. The case, which centers around circular trading and a web of bogus firms, has led to the CA being placed in judicial custody until May 21, 2025, following a magistrate’s order, according to a statement from the Ministry of Finance.
Investigators uncovered that the accused had fraudulently created and operated over 80 GST Identification Numbers (GSTINs), mainly registered in Palam and Dwarka. These GSTINs were traced back to the CA’s personal contact details and email addresses. A closely connected group of 31 GSTINs was actively engaged in circular trading—generating fake invoices to fraudulently claim ITC without any genuine transaction of goods or services.
Searches were carried out at 12 locations, revealing that multiple firms linked to the fraud were entirely fictitious. Authorities seized key electronic devices and recorded critical testimonies that further confirmed the scale of manipulation.
During the probe, several taxpayers admitted that they had completely handed over their GST compliance responsibilities to the Chartered Accountant—granting him unrestricted access to login credentials and full control of their filings. This facilitated centralized manipulation of filings and submission of fake claims.
“The case highlights a widespread abuse of the GST system through impersonation, misuse of user credentials, and collusive circular trading,” the Finance Ministry stated. The investigation is being conducted under the CGST Act, 2017, with ongoing efforts to identify all entities that benefitted from the fake ITC credits.
This incident serves as a stark reminder for businesses to thoroughly vet service providers handling tax compliance and reinforces the need for proactive oversight by GST authorities to prevent revenue leakage.
Key Legal References:
-
Section 132(1)(b), 132(1)(c), and 132(5) – Fraudulent claim of ITC without actual supply and issuance of fake invoices
-
Section 69(1) – Powers to arrest for GST violations
-
Section 132(1)(i) – Offense punishable with imprisonment and fine
Date of Arrest: May 7, 2025
Remand Ordered Till: May 21, 2025
Location of Operations: Palam & Dwarka, Delhi
Number of Suspect GSTINs: 80+
Fake Entities Identified: 31 core firms involved in circular trading
Official Statement:
Download
This blog post is auto-generated and intended for informational use only. Please consult legal or tax professionals for case-specific guidance.
Comments
Post a Comment
If you have any doubts, Please let me know