DGGI Uncovers ₹266 Crore Fake Invoice Scam Involving ₹48 Crore GST Fraud; One Arrested

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In a major crackdown on GST fraud, the Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit, has unearthed a fraudulent network involving six shell companies that issued fake invoices worth over ₹266 crore. The scam facilitated the illegal availment and transfer of Input Tax Credit (ITC) amounting to ₹48 crore.

The DGGI carried out coordinated searches across six premises in Delhi as part of a follow-up operation linked to an ongoing investigation initiated in Bengaluru. During the raids, original invoices, company seals, and incriminating documents were recovered from the premises associated with the prime accused.

According to investigators, the accused floated multiple shell companies with no real business activity and engaged in circular trading to artificially inflate turnover. Shockingly, one of the companies was also listed on a stock exchange, potentially endangering the interests of retail investors.

Initial findings pointed to a Chartered Accountant, who also served as a statutory auditor for some of these entities, as the key mastermind. He not only managed financial transactions but was also found to be acting as a director in a few of the shell firms at various points in time. This established a clear nexus behind the creation and operation of the fraudulent network.

DGGI officials have confirmed that further investigation is ongoing, especially regarding the role of listed entities in such frauds. The matter has serious implications for market integrity, and specific intelligence has been shared with the Securities and Exchange Board of India (SEBI) to consider necessary regulatory action under the SEBI Act.

The arrested individual is currently in judicial custody, and DGGI Bengaluru is continuing its probe into potential links with other shell companies and beneficiaries.