In a shocking revelation, the Anti-Corruption Bureau (ACB) of the Delhi Government has uncovered a massive fraud involving the siphoning off of ₹ 54 crore from the Goods and Services Tax (GST) Department. A rogue tax officer, a trio of lawyers, and several accomplices orchestrated this elaborate scheme, which involved over 500 fake companies and fraudulent GST refunds. The investigation has shed light on a complex web of deceit that exploited the very system designed to ensure tax compliance.
The Special 7 and 500 Firms
The scheme, now referred to as the "Big GST Heist," was the brainchild of a GST Officer named Babita Sharma. She, along with three lawyers, two transporters, and a bogus company owner, masterminded a plot that involved the creation of 500 fake firms. These companies existed only on paper and were purportedly involved in the import and export of medical goods. The group used these fake entities to generate invoices worth a staggering ₹ 718 crore, all aimed at claiming GST refunds.
Babita Sharma played a pivotal role in the scam. Between 2021 and 2022, she approved over 400 fraudulent GST refunds amounting to ₹ 35.51 crore through 96 fake firms. The first year saw a modest approval of refunds worth ₹ 7 lakh, but the pace quickened as the operation expanded, with the majority of the fraudulent refunds being approved later. This rapid approval of refunds raised suspicions within the GST Department, prompting further investigation.
Rogue Tax Officer, 3 Lawyers, 500 Firms - Big GST Heist Uncovered In Delhi -
Babita Sharma, the GST Officer (GSTO), hatched a plan with 96 fake firms and approved over 400 refunds worth ₹ 35.51 crore between 2021 and 2022. In the first year, only refunds worth ₹ 7 lakh were… — CA Anupam Sharma (@caanupam7) August 13, 2024
The Rogue Officer's Modus Operandi
Babita Sharma's transfer to Ward 22 of the GST office in 2021 marked the beginning of a suspicious chain of events. Within days of her transfer, over 50 firms applied for migration from Ward 6 to Ward 22, and their requests were swiftly approved. The speed of these approvals, coupled with the sheer volume of requests, triggered alarm bells within the GST Vigilance Department.
The subsequent probe uncovered a staggering level of fraud. The fake firms generated invoices for non-existent transactions, amounting to ₹ 718 crore. These fake purchases were made solely on paper, with no actual exchange of goods or services. Despite this, the GST Officer issued refunds without verifying the invoices or the corresponding Input Tax Credit (ITC).
The investigation revealed that over 40 of these fake firms claimed to supply goods in the initial phase of the operation. However, no records of these transactions were found in the second phase, further indicating the fraudulent nature of the scheme. In some cases, the mandatory Aadhar Card and physical verifications for GST registration were entirely bypassed, a glaring violation of the established rules.
Unraveling the Fraud: The Lawyers' Involvement
The ACB's investigation into the heist revealed the intricate involvement of three lawyers—Rajat, Mukesh, and Narendra Saini. These lawyers and their family members were the beneficiaries of the fraudulent GST refunds, with the money being funneled into multiple bank accounts directly linked to the fake firms. The ACB identified over 1,000 bank accounts connected to the scam, highlighting the extensive network used to launder the stolen funds.
The lawyers operated 23 fake firms from a single email ID and mobile number, with several of these firms registered under the same PAN number. This allowed them to generate different GST registration numbers, facilitating the creation of fake invoices worth ₹ 173 crore. Among these firms, seven were involved in the purported supply of medical goods, showing business worth ₹ 30 crore in their invoices. However, these transactions were entirely fabricated, designed solely to claim fraudulent GST refunds.
The Aftermath and Arrests
The ACB's investigation led to the arrest of multiple individuals involved in the scam. Among those apprehended were Manoj Goyal, the owner of one of the fake firms, and two transporters, Surjeet Singh and Lalit Kumar. The transporters were found to have generated forged e-way bills and receipts, claiming to transport goods that never existed. They received payment for these fake documents without offering any actual services.
The exposure of the Big GST Heist has sent shockwaves through the Delhi GST Department and the broader tax administration system. The case underscores the vulnerabilities within the GST framework and the need for stricter oversight to prevent such large-scale fraud in the future. The ACB continues its investigation, with more arrests and revelations expected as the probe deepens.
Inputs by Agencies
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