Tax officer among 7 arrested in Rs 54-crore GST scam

A tax officer in the Delhi government is among seven people arrested by the Anti-Corruption Branch (ACB) in the alleged Goods and Service Tax (GST) refund scam worth ₹54 crore.

The GST officer, three lawyers and a few others including transporters were part of the fraud, officials said.

Their network included 500 fake companies as well as fake invoices worth ₹718 crore. All this enabled them to claim GST refunds worth ₹54 crore.

Fake companies, fake bills

According to officials, the 500 companies existed on paper and were shown to be involved in the import and export of medical goods to claim GST refunds.

Babita Sharma, the GST officer, was accused of hatching the elaborate a plan with 96 fake firms. She approved more than 400 refunds worth ₹35.51 crore between 2021 and 2022.

In the first year, the refunds totalled ₹7 lakh but the amount shot up in the later years.

Migration aroused suspicion

In 2021, Sharma was transferred to Ward 22 of the GST office. Within days, more than 50 firms applied for migration from Ward 6 to 22. This was approved within a short period.

It was this migration that raised alarm bells. When the GST vigilance wing sent teams to the offices of these firms, it led to the unearthing of the GST fraud.

The fake firms generated invoices worth ₹718 crore after claiming to have made purchases although everything took place only on paper, the anti-corruption bureau uncovered.

No Aadhar card verification

The officer issued refunds without verification of invoices and Input Tax Credit or ITC.

Fifteen of the firms did not have their Aadhar Card or physical verification done at the time of GST registration in clear violation of the mandated rules.

Of the 53 firms which migrated to Ward 22 after the officer's transfer, 48 were given a GST refund of ₹12.32 crore.

Lawyers involved in scam

The GST refunds were reportedly issued into the bank accounts of three lawyers -- Rajat, Mukesh and Narendra Saini and their family members.

A total of 1,000 bank accounts were found to be directly related to the fake firms.

A total of 23 firms had the same email ID and mobile numbers. Five firms were registered under the same PAN number and email ID.

Role of transporters

Of these 23 fake companies, seven were said to be involved in the supply of medical goods and had shown business of ₹30 crore in their invoices.

Among those taken into custody were transporters Surjeet Singh and Lalit Kumar. They allegedly got money for providing documents without giving any service.