In a major enforcement breakthrough, the Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit, has busted a large-scale racket involving fraudulent availment and passing of Input Tax Credit (ITC) worth approx. ₹645 crore. The fraud was executed through an intricate web of 229 dummy GST-registered firms, allegedly controlled by a Delhi-based syndicate.

In a major enforcement breakthrough, the Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit, has busted a large-scale racket involving fraudulent availment and passing of Input Tax Credit (ITC) worth approx. ₹645 crore. The fraud was executed through an intricate web of 229 dummy GST-registered firms, allegedly controlled by a Delhi-based syndicate.

Key Findings from the Investigation

Acting on credible intelligence, DGGI officers launched coordinated searches across multiple locations in Delhi. The operations unearthed a staggering collection of incriminating materials, including:

• 162 mobile phones suspected to be used for OTP-based GST and banking transactions

• 44 Digital Signatures

• 200+ cheque books of various entities

• Ledgers, documents & digital devices capturing the operational trail

The bogus entities were found to be issuing invoices without any actual supply of goods or services, enabling the fraudulent generation and circulation of ineligible ITC, resulting in significant revenue loss to the Government.

Mastermind Arrested

The investigation has identified Shri Mukesh Sharma as the alleged mastermind behind the network. Evidence indicates his involvement in:

• Managing fake GST registrations and return filings

• Operating banking accounts of dummy firms

• Layering and routing illicit funds

Given the nature of offences, which are cognizable and non-bailable, he has been arrested under Sections 132(1)(b) & 132(1)(c) of the CGST Act, 2017 and remanded to judicial custody.

Possible Money-Laundering Angle

The probe has also revealed a potential money-laundering component, where proceeds of the fake ITC racket were allegedly funneled through an NGO and a political outfit. Further investigation is currently underway.

Implications for Taxpayers & Businesses

This case reinforces key compliance priorities:

• Strict verification of vendors and their GST credentials

• Avoidance of high-risk or suspicious ITC chains

• Maintaining documentary evidence of genuine supply

• Exercising enhanced due diligence in high-value transactions

The DGGI's swift action showcases the increasing use of data analytics and intelligence-driven operations to curb fake invoicing and safeguard GST revenue.

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Ministry of Finance

DGGI Delhi Zonal Unit uncovers racket for fraudulently availaing Rs. 645 crore ITC; Key operator arrested

Posted On: 13 NOV 2025

The Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit, has uncovered a massive case of fraudulent availment and passing of Input Tax Credit (ITC) through a web of 229 dummy GST-registered firms, controlled and operated by a Delhi-based syndicate.

Acting on credible intelligence, DGGI officers conducted coordinated search operations at multiple premises across Delhi, unearthing huge cache of incriminating documents, digital devices, and ledgers that established the operation of non-existent firms engaged in issuing invoices without actual supply of goods or services. This included 162 mobile phones, probably used to get OTPs for GST/banking purposes, 44 Digital signatures and over 200 cheque books of various firms. The preliminary findings indicate that these bogusentities were engaged in issuance of invoices without any actual supply of goods or services, resulting in the fraudulent passing of ineligible ITC amounting to Rs. 645 crore approx, causing substantial loss to the exchequer.

Investigations have revealed that Shri Mukesh Sharma, a key conspirator, orchestrated the operations of this network of fake entities. Evidence points to his active role in managing GST registrations and returns and records of dummy firms, managing banking transactions, and facilitating the circulation of illicit funds through multiple layers. As the offences of Sh. Mukesh Sharma are cognizable and non-bailable, he has been arrested on 11.11.25 under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 and has been sent to judicial custody.

The investigation has also brought to light a possible money-laundering component, wherein proceeds of the fraud were allegedly rotated through an NGO and a political outfit.Further investigation is underway.