The Delhi Government's Anti-Corruption Bureau (ACB) has identified a large Goods and Service Tax (GST) scam involving 96 fictitious firms worth Rs 54 crore, authorities said on Monday. Babita Sharma, a GST official, was one of seven people who carried out the scheme.
Madhur Verma, Joint Commissioner of Police, ACB, stated that in addition to Sharma, three advocates: Raj Singh Saini, Narender Kumar Saini, and Mukesh Soni; two transporters; and the owner of a fictitious company were allegedly involved in the scam, which relied on the use of approximately 100 fake companies to generate fraudulent GST claims.
These fictitious firms were utilized to fabricate invoices totaling Rs 718 crore in order to claim GST refunds. According to the investigation, these fake organizations reportedly imported and exported medical items.
Sharma is claimed to have devised a scheme to defraud the GST administration by utilizing 96 bogus entities. Between 2021 and 2022, she granted over 400 reimbursements totaling Rs 35.51 crore. The advocates were the recipients of the reimbursement she approved. The carriers received reimbursements after providing fraudulent e-way invoices and falsified product receipts.
How did the GST Department discover the scam?
In September 2021, following Sharma's move to Ward 22 of the GST office, the GST Vigilance Department noticed an unexpected increase in migration requests. Within a few days, over 50 enterprises asked to shift from Ward 6 to Ward 22, and their applications were rapidly accepted, raising suspicion and prompting the government to initiate an inquiry.
Upon a physical check of the places, the businesses were shown to be non-existent. Furthermore, the ACB discovered that Sharma approved the reimbursements without verifying the Input Tax Credit, a critical measure for detecting false claims.
Additional inconsistencies were discovered, including the use of identical PAN numbers, email addresses, and cellphone numbers by several organizations, as well as the lack of Aadhaar validation for others.
