Eight CAs among 258 arrested since mid-November in GST fraud

Government agencies have arrested 258 people, including eight Chartered Accountants (CAs) in its nationwide drive against Goods and Services Tax (GST) fraud launched in mid-November to nab unscrupulous elements using fake invoices to fraudulently claim input tax credit, two officials familiar with the developments said Sunday.

“One CA was arrested on Saturday along with four businessmen in Jaipur for operating 25 fake firms to fraudulently avail and pass on ITC (input tax credit) through bogus invoices without actual supplies of goods and services,” one of the officials working in the Union finance ministry said requesting anonymity.

Out of the 258 arrested so far, at least two have been booked under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA), a second official, working for the directorate general of GST intelligence (DGGI), said.

The drive by various GST authorities is still on and so far more than 2,500 case have been booked against 8,000 fake GST-registered entities, he said. “Authorities have recovered more than ₹820 crore from these fraudsters,” he added.

The chartered accountants’ regulatory body -- Institute of Chartered Accountants of India (ICAI) have been informed about these arrests and have been asked to take appropriate actions as per their own rules,” the first official said. Arrested CAs are from Jaipur, Mumbai, Ahmedabad, Chennai, Delhi, Hyderabad and Ludhiana. “They were operating multiple non-existent firms and fake entities to dupe the exchequer with fraudulent ITC utilisation in connivance with fraudsters and fly-by-night operators,” he said.

Enforcement agencies have used data analytics and artificial intelligence (AI) to process data exchanged among GST authorities, customs department and income-tax offices and pin-pointedly identify unscrupulous elements, he said.

“It is through such systemic changes, the department has now been able to take targeted actions against fraudsters and tax evaders. It is with these measures that the DGGI has not only been able to unearth the fake firms but also the final beneficiaries of ITC frauds,” he said.

“Action has been initiated against big companies such as a popular online food ordering and delivery platform and a subsidiary of an e-commerce giant,” he said.

The concerted nationwide drive against bogus GST invoice fraud has ensured better GST compliance to identify tax evaders and those availing input tax credits fraudulently, and thus, has resulted in record GST collection to the tune of more than ₹1.15 lakh crore for the month of December, 2020, he said.