The Chandigarh zonal unit of the Directorate General of GST Intelligence (DGGI) claimed to have busted a network reportedly involved in generating fraudulent Input Tax Credit (ITC) through the issuance of invoices without the actual supply of goods. The mastermind, identified as Manmohan Singh of Ludhiana, has been arrested, it said.
GST officials said the fraud involved multiple business entities, including M/s JHA and JHA Enterprises (Delhi), M/s Goyal Trading Agency (Delhi), M/s MAA Vaishno Enterprises (Delhi), M/s SS Enterprises (Ludhiana), M/s PC Techno Solutions (Ludhiana) and M/s PMI Smelting Private Limited (Ludhiana). These firms were found issuing fake invoices for zinc products, the DGGI mentioned.
Preliminary analysis indicates a widespread network of bogus firms with the quantum of fraudulent Input Tax Credit currently estimated at approximately ₹30.21 crore. This figure is expected to rise as the investigation progresses.
Investigations revealed that Manmohan Singh was actively involved in establishing and operating this racket, creating the aforementioned firms to generate and avail ineligible ITC. Furthermore, it has been uncovered that Singh, in collusion with other individuals under the agency’s scanner, allegedly facilitated banking transactions and arranged cash movements in exchange for commissions to enable these illicit activities.
An official said that Manmohan has been remanded to judicial custody. “Such fraudulent activities pose a severe threat to the integrity and efficacy of the indirect taxation framework, undermining the foundational principles of transparency, equity and voluntary compliance. The generation of fictitious invoices and wrongful ITC claims not only distort market equilibrium by placing bona fide taxpayers at a competitive disadvantage but also results in significant revenue loss to the exchequer,” he added.
{{/usCountry}}An official said that Manmohan has been remanded to judicial custody. “Such fraudulent activities pose a severe threat to the integrity and efficacy of the indirect taxation framework, undermining the foundational principles of transparency, equity and voluntary compliance. The generation of fictitious invoices and wrongful ITC claims not only distort market equilibrium by placing bona fide taxpayers at a competitive disadvantage but also results in significant revenue loss to the exchequer,” he added.
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