Massive 5,300 Crore GST Fraud Uncovered, Know The Details
In an audacious display of deceit, a massive Rs 5,300-crore Goods and Services Tax (GST) fraud has been uncovered, shedding light on a complex network of fraudulent activities stretching across the Delhi-Noida-Lucknow belt. This elaborate scheme, orchestrated by a group of sophisticated criminals, relied on stolen identities, frequent changes in mobile numbers, high-end luxury cars, and fake documents to evade detection for over six months.
The Unraveling of a Multi-Tiered Scam
The fraud, one of the largest ever discovered under the GST regime, came to light due to seemingly innocuous digital footprints. FASTag text messages from toll booths and one-time passwords (OTPs) from food delivery apps like Zomato and Swiggy became the key tools for law enforcement to track the suspects. These digital clues allowed authorities to pinpoint the locations of the individuals behind the scheme, leading to significant breakthroughs in the case.
The investigation began about a year ago when a resident of Noida reported a case of identity theft and fake GST registrations in his name. The local police initiated their probe in May 2023, and what they uncovered was astonishing. The fraudulent network had generated fake input tax credit (ITC) worth Rs 5,300 crore using bogus invoices amounting to Rs 15,300 crore.
Modus Operandi: A High-Stakes Game of Hide and Seek
The fraudsters’ modus operandi was as elaborate as it was daring. Operating from high-end luxury cars such as Maseratis and BMWs, they zipped through state borders during the day, only to check into upmarket hotels under fake identities by night. Their frequent changes in mobile numbers and strategic use of digital services made tracking them a challenging task.
The Noida police initially arrested 18 individuals last year who were found with PAN data of over 6 lakh people, creating fake GST registrations. The extent of the scam led to further investigations by the Directorate General of GST Intelligence (DGGI) and the Financial Intelligence Unit (FIU), revealing approximately 13,000-14,000 risky GSTINs linked to these fraudulent activities. After a detailed analysis, around 8,000 independent, risky GSTINs were identified.
Technological Tools and Analytical Techniques
To unmask the fraudsters, authorities relied heavily on technology and data analytics. The suspects frequently switched off their mobile phones, turning them on only to receive necessary OTPs from delivery apps, making it possible for the police to track them. By analyzing which mobile numbers were switched on after specific intervals, authorities could locate the suspects. Internet service providers were also contacted to locate the modems associated with the suspects’ IP addresses.
The use of FASTag data was instrumental in tracking the movement of luxury cars along the Delhi-Noida-Lucknow route. This high-tech approach enabled law enforcement to piece together the puzzle and apprehend the key players.
Recent Arrests and Ongoing Investigations
Recent arrests have provided significant leads in the case. Sanjay Dhingra, promoter of GoodHealth Industries, along with his wife and son, were apprehended for allegedly using fake bills over the past four to five years. Earlier, in March, Haryana-based businessmen Ajay Sharma and Sanjay Jindal were arrested for availing of fake ITC using forged documents. These individuals have been booked under various sections of the Indian Penal Code, including cheating, forgery, and criminal conspiracy.
The Noida police have cancelled or suspended over 40 percent of the 6,200 verified GSTINs, exposing the depth of the fraud. In many cases, there were no real supply of goods or services, and fake addresses were used to create fraudulent invoices to claim ITC refunds.
National Security Implications and Future Measures
The misuse of identification documents in this fraud has raised national security concerns. The seamless execution of the scam highlights vulnerabilities in the current GST system and the need for stricter verification processes. None of the arrested individuals have been granted bail, underscoring the serious implications of their actions.
As the investigation continues, authorities remain vigilant, aiming to arrest the remaining suspects and prevent future occurrences of such extensive fraud. The unraveling of this GST scam not only showcases the importance of advanced technological tools in law enforcement but also serves as a warning to those who exploit the system for illegal gains.
