Delhi GST Department Busts ₹14 Crore Refund Scam; ₹1.16 Crore Recovered, One Arrested
In a major crackdown on tax evasion, the Delhi State Goods and Services Tax (GST) Department has unearthed a ₹14 crore refund fraud involving four fictitious firms created solely to claim illegal tax refunds. The department has recovered ₹1.16 crore so far and arrested one individual in connection with the scam.
According to a press release issued by the Department of Trade and Taxes, Government of NCT of Delhi, the fraudulent network was operating under the guise of genuine business activity but was actually involved in generating fake invoices to illegitimately claim GST refunds. This is the first case of its kind where the department used advanced big data analytics and banking chain analysis to identify and act against the scam.
Investigations revealed that the entities involved shared common PAN numbers, mobile phone numbers, and email addresses, pointing towards a coordinated effort to deceive the tax system. The registration of the Delhi-based firms involved has been suspended, and relevant authorities in other states have been alerted for further action on related entities in their jurisdictions.
The trail of fake transactions and fund transfers extended beyond Delhi, reaching other Indian states and even foreign locations such as Hong Kong and Singapore. Authorities say this highlights the scale and sophistication of the fraud.
The Delhi GST Department worked in coordination with the Income Tax Department to flag and recommend the blocking of PANs associated with the bogus firms. A detailed report has also been submitted to the Department of Revenue, Government of India, for further investigation into the international links of the operation.
To prevent further diversion of funds, the authorities have frozen 45 bank accounts linked to 27 different entities. An FIR has been registered with the Economic Offences Wing (EOW) of the Delhi Police to pursue legal action.
In a key breakthrough, the department arrested Bunty, son of Harish Chander, who was the proprietor of one of the firms involved in the scam. He was presented before a Metropolitan Magistrate’s Court and remanded to police custody for further interrogation.
A senior official from the GST Department noted that this operation demonstrates the government’s zero-tolerance stance toward tax fraud and its increasing use of technology and inter-agency coordination to tackle financial crimes. “This case is a warning to all tax evaders—any attempt to defraud the system will be met with strict legal consequences,” the official said.
Efforts to recover the remaining fraudulent refunds are ongoing.
IT.
