Chartered Accountant Nabbed in Massive GST ITC Scam
In a major crackdown on tax fraud, South Delhi CGST officials have arrested a chartered accountant (CA) for allegedly claiming fake Input Tax Credit (ITC) worth Rs. 7.85 crore.
A Complex Web of Fraud
The investigation, which spanned several months, uncovered a sophisticated scheme involving the misuse of over 80 GSTINs (Goods and Services Tax Identification Numbers) primarily located in the Palam and Dwarka areas. Authorities discovered that these GSTINs were linked to the CA’s email addresses and phone numbers. A key finding revealed a group of 31 GST numbers engaged in circular trading, a tactic where goods or services are artificially traded between connected entities to inflate ITC claims.
The CGST officials conducted searches at 12 locations, uncovering numerous fake firms or businesses that were not operational. During these raids, investigators seized crucial electronic devices and recorded statements from individuals involved in the scheme.
Dependence on the CA
Several taxpayers admitted to relying solely on the CA for their GST filings, revealing that he controlled all login credentials and submission processes. This confession highlights the extent of the CA’s influence and control over the fraudulent activities.
Legal Repercussions
The accused CA has been charged under sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017. These are serious offenses that carry stringent bail conditions under Section 132(5) and are punishable under Section 132(1)(i) of the same Act. The CA was taken into custody under Section 69(1) of the CGST Act, 2017, and presented before a duty magistrate on May 6, 2025. The magistrate subsequently ordered his detention for 14 days, until May 21, 2025.
This case serves as a stark reminder of the vulnerabilities within the GST framework and the potential for exploitation through impersonation, credential misuse, and collusive circular trading. The investigation is ongoing, with authorities determined to expose the full extent of the scam and apprehend all individuals involved.
