The Department of Trade and Taxes, Government of Delhi, has uncovered a major case of Goods and Services Tax (GST) refund fraud amounting to nearly Rs 14 crore. The investigation revealed a network of individuals who created and operated four fictitious firms solely to illegitimately claim GST refunds under the guise of genuine business activities.
This case marks a first-of-its-kind operation by the Department, where cutting-edge big data analytics and detailed chain analysis—including scrutiny of banking transactions—were employed to trace the flow of funds across multiple entities located in Delhi, other states, and international jurisdictions such as Hong Kong and Singapore.
The Department’s data-driven investigation identified multiple entities using the same PAN, mobile numbers, and email addresses as those used by the fraudulent firms.
As an immediate enforcement measure, the registration of the Delhi-based entities has been suspended.
Information has also been shared with jurisdictional authorities in other states for further action.
In coordination with the Income Tax Department, the Department has flagged and recommended blocking the PANs associated with the fraudulent activities to prevent further misuse.
Since funds were traced to entities outside India, a detailed report is also being submitted to the Department of Revenue (DoR), Government of India.
Swift recovery efforts have been launched. So far, Rs 1.16 crore has been recovered, and proceedings are underway to retrieve the remaining amount.
The Department has frozen 45 bank accounts linked to 27 implicated entities, preventing further movement or diversion of illicit funds.
An FIR has been lodged with the Economic Offences Wing (EOW) of Delhi Police. One key accused, Bunty, proprietor of one of the beneficiary firms, has been arrested from Delhi and remanded to police custody. Further arrests are expected.
