CGST Delhi Busts Rs. 31.95 Crore Fake ITC Scam
- Company director arrested for fraudulent transactions and fake invoices
- Probe reveals large-scale fake Input Tax Credit claims under CGST Act
The Central GST (CGST) Delhi South Commissionerate has exposed a massive Rs 31.95 crore tax fraud involving a company accused of availing fake Input Tax Credit (ITC) through bogus invoices. The director of the company has been arrested and remanded to 14 days of judicial custody, officials confirmed on Friday. The crackdown marks a major success for the anti-evasion branch in its continuing drive to curb GST-related financial crimes.
According to an official statement, the investigation showed that the company fraudulently availed ITC based only on invoices without any actual supply of goods or services. Acting on specific intelligence developed by the anti-evasion wing, officials traced a suspicious supply chain that revealed manipulated transactions and forged documentation. The firm was found to have availed and passed on ineligible ITC from fictitious and non-existent companies, violating the Central Goods and Services Tax Act, 2017.
The CGST department’s investigation established that this fraud was part of a larger pattern of tax evasion that directly causes revenue loss to the government. Officials stated that the department has been using data analytics and supply chain mapping tools to identify firms involved in similar fraudulent activities. “The case forms part of the broader initiative undertaken by the CGST Delhi South Commissionerate to unearth fraud ITC cases that lead to significant revenue leakage and undermine fair market practices,” the statement said.
Meanwhile, official data shows that the number of ITC fraud cases has more than doubled over the past three years. Central GST formations detected 7,231 such cases in 2022–23, with a value of Rs 24,140 crore. This number rose sharply to 15,283 cases in 2024–25, involving Rs 58,772 crore. The government has tightened compliance norms to prevent such fraud, including restricting ITC claims to invoices filed by genuine suppliers in FORM GSTR-1 and linked through FORM GSTR-2B.
Officials reiterated that registered persons who fail to file their monthly return in FORM GSTR-3B for the preceding tax period will not be allowed to submit GSTR-1, ensuring stricter control against fraudulent filings. The recent CGST operation serves as a strong warning against firms attempting to misuse the ITC framework for unlawful gains.
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