Delhi CGST Busts Rs. 7.85 Crore GST ITC Fraud; Chartered Accountant Arrested in Major Crackdown.
New Delhi:
In a significant operation against tax evasion, officials of the CGST Delhi South Commissionerate have unearthed a massive fraudulent Input Tax Credit (ITC) scam worth approximately Rs. 7.85 crore, leading to the arrest of a South Delhi-based Chartered Accountant.
The investigation exposed a network of over 80 GSTINs, primarily from the Palam and Dwarka regions, misused to claim ineligible ITC. Shockingly, a core group of 31 GSTINs was found involved in circular trading — with no real movement of goods or services — effectively manipulating the tax system to generate fake credits.
Search operations were carried out at 12 premises linked to the CA and the alleged firms, many of which were found to be non-existent. Authorities seized multiple electronic devices, and recorded statements from individuals linked to the filings. Several taxpayers confessed they had handed over complete control of their GST credentials to the accused, who centrally managed all filings and transactions.
The offences fall under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the CGST Act, 2017, which deal with availing ITC without actual receipt of goods or services and are classified as cognizable and non-bailable. The CA was arrested under Section 69(1) and remanded to 14 days’ judicial custody by the Duty Magistrate on May 7, 2025.
Officials highlighted that the fraud represents systemic abuse of the GST framework through impersonation, credential misuse, and collusive trading. Ongoing investigations aim to identify all participants and beneficiaries of the scam, and further legal action is expected.
This crackdown underscores the government’s resolve to safeguard the GST system from fraud and misuse, particularly through professional enablers exploiting regulatory gaps.
