Economic Fraud
DGGI Uncovers Rs 3,200 Crore GST Fraud; Two Arrested, One Absconding
Bengaluru: The Directorate General of GST Intelligence (DGGI) in Bengaluru has unearthed a massive Rs 3,200 crore GST fraud, leading to the arrest of two individuals, while a third suspect remains absconding, officials confirmed on Wednesday. According to Additional Director General Sucheta Sreejesh, the Bengaluru Zonal Unit of DGGI conducted searches at over 30 locations in Bengaluru and Mumbai, exposing a sophisticated financial scam involving bogus companies, circular trading, and fake Input Tax Credit (ITC) claims totaling Rs 665 crore.
Registrations Open for FutureCrime Summit 2025: India’s Largest Conference on Technology-Driven Crime
Bogus Firms, Circular Trading, and Stock Market Manipulation
The investigation revealed that the accused created fake companies with no legitimate business operations. These companies falsely reported receiving FMCG goods worth hundreds of crores, but instead, only issued invoices for IT support, management consultancy, and advertising services. Notably, nine of these entities were listed on Indian stock exchanges, raising further concerns. Officials discovered that these firms engaged in circular trading to inflate turnover, manipulate share prices, and later sell their shares at inflated rates, ultimately duping investors.
Despite generating inward e-way bills, these companies had no outward e-way bills, indicating the fraudulent nature of their transactions. Moreover, the GST returns for most of these firms were filed from common IP addresses, suggesting that they were controlled by the same group of individuals.
Raids Reveal Key Evidence
During the searches, original invoices, financial records, and crucial documents were recovered from multiple locations, further establishing the fraudulent activities. “Considering the magnitude of the fraud and its impact on the public, the DGGI Bengaluru Zonal Unit has launched a comprehensive investigation into the matter,” Sreejesh stated. Authorities are now intensifying their probe to track the absconding suspect and identify any further links to the scam.
