In the Financial Year 2023-24 (up to December 2023), the Directorate General of GST Intelligence (DGGI) has made significant strides in detecting and combating fraudulent Input Tax Credit (ITC) cases. This has resulted in the apprehension of numerous fraudsters and the identification of substantial financial irregularities.
Detection of Fake ITC Cases
- Statistics
- Detected Cases: 1,700
- Involved Amount: Rs. 18,000 crore
- Apprehended Fraudsters/Masterminds: 98
- Operational Focus of DGGI
- Special emphasis on identifying and apprehending masterminds of fake ITC.
- Disruption of syndicates operating nationwide.
Modus Operandi
- Utilization of Gullible Individuals
- Syndicates exploit individuals with promises of jobs, commissions, or bank loans.
- Extraction of Know Your Customers (KYC) documents without consent.
- KYC Method and Pecuniary Benefits
- Some cases involve the use of KYC with the knowledge of the concerned person, who receives small pecuniary benefits.
Specific Cases
- Case in Sirsa, Haryana
- Detection through E-way bill portal and data analytics.
- Unveiling of a racket of fake firms.
- Seizure of evidence, laptops, mobile phones, SIM cards, and arrest of key operator, Mr. Manoj Kumar.
- Potential evasion of Rs. 1,100 crore in fraudulent ITC.
- Case in Jaipur, Rajasthan
- Beneficiary firms booked for availing ITC from fake firms.
- Mr. Ashutosh Garg arrested for creating and selling fake firms, passing on fake ITC of Rs. 1,033 crore.
- Case in West Sagarpur, Delhi
- Utilization of a specific IP address for filing GST returns of fake firms.
- Search conducted, evidence seized, and arrest of individuals involved.
- Admission of creating and operating 122 fake firms, passing on fake ITC of Rs. 315 crore.
- OPC Fraud in Pitampura, Delhi
- Formation or purchase of one-person companies (OPCs) for ITC fraud.
- Search in Pitampura reveals evidence of 190 fake firms and ineligible ITC of Rs. 393 crore.
- Arrest of Mr. Rahul with multiple forged PAN and Aadhar cards.
Conclusion
The cases presented highlight the DGGI’s proactive measures in uncovering and addressing fraudulent ITC activities. The arrests and seizures demonstrate the commitment to curbing tax evasion and ensuring the integrity of the GST system.
Multiple-Choice Questions (MCQs):
- What is the primary focus of the Directorate General of GST Intelligence (DGGI) in the current financial year?
- a) Tax collection
- b) Identifying fake ITC cases and apprehending masterminds
- c) Data analysis for economic forecasting
- d) Job creation initiatives
- In the case from Sirsa, Haryana, what technical tools were utilized by DGGI for detection?
- a) Traditional surveillance
- b) E-way bill portal and data analytics
- c) Manual audits
- d) Random inspections
- What is the potential amount of fraudulent ITC evasion indicated in the Jaipur, Rajasthan case?
- a) Rs. 500 crore
- b) Rs. 1,033 crore
- c) Rs. 315 crore
- d) Rs. 393 crore
- What method is used by some tax syndicates to extract Know Your Customers (KYC) documents from individuals?
- a) Legal contracts
- b) Direct threats
- c) Pecuniary benefits
- d) Anonymous surveys