Delhi’s Anti-Corruption Branch Uncovers Rs 54 Crore GST Refund Scam Involving Fake Firms
The Anti-Corruption Branch (ACB) of Delhi has uncovered a massive fraud involving around 500 fake firms that claimed bogus GST refunds worth Rs 54 crore. These firms were involved in the export of medicines and medical items, but only on paper.
Details of the Scam
According to officials, these fake firms fraudulently received GST refunds worth approximately Rs 54 crore. Additionally, forged invoices amounting to around Rs 718 crore have surfaced. The GST Officer (GSTO) involved approved these refunds without proper verification, leading to significant losses for the government.
Arrests Made
As part of the ongoing investigation, the ACB has arrested two employees, an accountant and a chartered accountant, who were closely involved in facilitating the fraudulent claims. In the first phase of arrests on August 12, 2024, the ACB had arrested a GSTO, three advocates, two transporters, and a proprietor of fake firms.
Investigation Findings
The investigation revealed that the GSTO had sanctioned Rs 35.51 crores in 2021-22 by approving 404 refunds, whereas the previous year’s refund to these firms was only Rs 7 lakhs. The GSTO was performing duties in Ward No. 6 until July 2021 and was transferred to Ward No. 22, where 53 firms applied for migration and were approved quickly.
Suspecting foul play, the Vigilance/GST Department conducted physical verification of these firms, finding them non-existent. A preliminary inquiry was ordered, leading to a detailed investigation by the ACB. The fraudulent GST refunds were approved without verification of Input Tax Credit, which is crucial for identifying fake refunds.
Further Investigation
The ACB has arrested a total of 09 accused in two phases of arrests. The investigation to unearth the role and culpability of other GST officials, proprietors, and transporters is ongoing.
Doubts Revealed
Anti-Corruption Branch (ACB) -: The Anti-Corruption Branch (ACB) is a special police unit that investigates and fights against corruption in government offices and among public officials.
GST Refund -: GST Refund is when the government gives back the extra money that businesses have paid as Goods and Services Tax (GST).
Fake Firms -: Fake firms are companies that do not really exist or do not do any real business. They are created just to cheat or commit fraud.
Rs 54 Crore -: Rs 54 Crore is a large amount of money. One crore is equal to 10 million, so 54 crore is 540 million rupees.
Accountant -: An accountant is a person who keeps and checks financial records for businesses or individuals.
Chartered Accountant -: A Chartered Accountant is a highly qualified accountant who has passed special exams and has a lot of experience in accounting and finance.
GST Officer (GSTO) -: A GST Officer (GSTO) is a government official who manages and oversees the collection of Goods and Services Tax (GST) from businesses.
Verification -: Verification means checking to make sure that something is true, accurate, or correct.
