Delhi ACB Uncovers ₹54 Crore GST Refund Scam, Arrests Seven Including GST Officer

New Delhi, August 13, 2024:  In a significant crackdown, the Anti-Corruption Branch (ACB) of Delhi has exposed a ₹54 crore scam involving fraudulent GST refunds within the Trade & Taxes department of the Delhi Government. The ACB has arrested a Goods and Services Tax officer, Babita Sharma, along with six others, including three advocates, two transporters, and a fake firm proprietor, for orchestrating the scam.

The investigation revealed that 96 fake firms were created to siphon off taxpayer money by claiming fraudulent GST refunds. Refunds worth ₹35.51 crore were approved between 2021 and 2022, with ₹7 lakh sanctioned in the first year and the remainder thereafter. Sharma, transferred to Ward No. 22 in July 2021, swiftly approved the migration of 53 firms to her ward. These firms, found to be non-existent during physical verification, were used solely to claim bogus refunds.

The ACB noted that these refunds were sanctioned within 2-3 days of filing, without the mandatory verification of Input Tax Credit (ITC). The fake firms, which purportedly conducted business worth ₹718 crores, were found to be engaged in nothing more than fraudulent transactions based on forged purchase bills. The investigation also revealed that the same group of offenders operated 23 out of the 96 fake firms, using common email IDs and mobile numbers to create fake invoices worth ₹176.67 crores and pocketing ₹5.81 crores in fraudulent refunds.

The ACB’s ongoing investigation has implicated over 500 non-existent firms and linked around 1,000 bank accounts to the scam. The role of other GST officials and proprietors remains under scrutiny.