The Central GST Delhi South Commissionerate, in a GST fraud, arrested a South Delhi-based Chartered Accountant for producing a huge Rs 7.85 crore Input Tax Credit (ITC) scam involving circular trading and fake firms.
The Ministry of Finance said in a statement that the CA has been remanded to judicial custody until May 21, 2025, following an order by the Duty Magistrate.
The investigation uncovered that over 80 Goods and Services Tax Identification Numbers (GSTINs), mostly registered in the Palam and Dwarka areas, were connected to the same chartered accountant’s email addresses and phone numbers. A key cluster of 31 GSTINs was involved in circular trading, falsely claiming Input Tax Credit (ITC) without any genuine supply of goods or services.
Across 12 locations, search operations were conducted, which discovered that various firms were not activated, revealing the insights of fabricated business entities. Electronic devices and recorded key statements are been seized by the authorities in the investigation.
Several taxpayers admitted to outsourcing their GST compliance completely to the accused CA, including handing over login credentials and control of GST filings, pointing to a systemic misuse of the GST ecosystem.
The ministry said, “The case demonstrates large-scale misuse of the GST framework through impersonation, misuse of credentials, and collusive circular trading.” Under provisions of the CGST Act, 2017, the investigation is proceeding with efforts to reveal all beneficiaries of the bogus ITC claims.
The incident specifies the requirement for businesses to practice due diligence while outsourcing GST compliance and for the continued vigilance by tax authorities to curb tax evasion.
