The CGST Delhi South Commissionerate has unearthed a significant GST fraud involving fraudulent Input Tax Credit (ITC) claims totaling ₹7.85 crore. The investigation revealed the misuse of over 80 GSTINs, primarily linked to a South Delhi-based Chartered Accountant. A core group of 31 GSTINs was identified for engaging in circular trading without any actual supply of goods or services. The fraud involved credential misuse, with GST filings controlled centrally by the Chartered Accountant. Search operations at 12 premises uncovered multiple non-existent firms, and relevant electronic evidence was seized. Statements from implicated individuals indicated reliance on the accused for GST filings. The offences fall under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017, which are non-bailable and cognizable under Section 132(5). The accused was arrested under Section 69(1) and remanded to judicial custody until May 21, 2025. This case underscores systemic abuse of the GST framework through impersonation and collusion in circular trading. Further investigations are ongoing to determine the full extent of the fraud and to identify other beneficiaries of the ineligible ITC claims.

Ministry of Finance

Delhi South CGST officials bust GST ITC fraud worth ₹7.85 crore; Chartered Accountant arrested

Investigations reveal misuse of over 80 GSTINs with a core group of 31 GSTINs engaged in circular trading, with no actual supply of goods or services

Posted On: 08 MAY 2025

In a major crackdown on Goods and Service Tax (GST) fraud, the CGST Delhi South Commissionerate has uncovered a fraud on a large-scale involving fraudulent Input Tax Credit (ITC) claims amounting to Rs. 7.85 crore (approx.) by a South Delhi based Chartered Accountant.

Investigations revealed misuse of over 80 GSTINs (Goods and Services Tax Identification Numbers), mainly in the Palam/Dwarka area, linked to the Chartered Accountant's email IDs and contact numbers. A core group of 31 GSTINs engaged in circular trading was identified, with no actual supply of goods or services.

Search proceedings were conducted at 12 premises and multiple firms were found non-existent. During searches, several electronic devices relevant to investigation were seized, and statements of the relevant people were recorded. Multiple taxpayers admitted to have been relying entirely on the Chartered Accountant for GST filings, with login credentials and filings centrally controlled by him.

The offences committed by the accused are covered u/s 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which is cognizable and non-bailable offence under Section 132(5) and punishable under Section 132(1)(i) of the Act ibid. Accordingly, the said Chartered Accountant was arrested under Section 69(1) of the CGST Act, 2017 and produced before Duty Magistrate on 07.06.2025 who remanded him to judicial custody for 14 days till 21.05.2025.

The case highlights a systemic abuse of the GST framework through impersonation, credential misuse, and collusive circular trading. Investigations are ongoing under CGST Act, 2017 to uncover the full scale of the fraud and identify all beneficiaries of the ineligible Input tax credit.