In a major breakthrough, a massive Goods and Services Tax (GST) fraud involving a corrupt tax officer, three lawyers, and an intricate network of 500 shell companies has been uncovered in Delhi. The scam, which swindled the government out of Rs54 crore through fake invoices and fraudulent GST refunds, was exposed by the Anti-Corruption Bureau (ACB) of the Delhi Government.
At the center of this Rs718 crore fake invoice scam was Babita Sharma, a GST Officer (GSTO), who played a pivotal role. Sharma, along with the help of 96 fake companies, approved over 400 refund claims amounting to Rs35.51 crore between 2021 and 2022. Initially, only refunds worth Rs7 lakh were processed, but the scheme rapidly escalated.
The scam began to unravel when an unusually high number of firms requested jurisdictional transfers to Ward 22, where Sharma had recently been posted. This raised suspicion among GST Vigilance teams, who soon discovered that these firms were non-existent, existing only on paper with no real business activity.
The fake companies generated invoices worth Rs718 crore for fabricated purchases and business activities, which were then used to falsely claim Input Tax Credit (ITC) and secure GST refunds. Over 40 of these firms reported supplying goods initially but later failed to provide records during investigations.
Further investigation revealed that 48 out of 53 firms that migrated to Ward 22 under Sharma’s jurisdiction received GST refunds totaling Rs12.32 crore. The scheme also involved three lawyers—Rajat, Mukesh, and Narendra Saini—who funneled the fraudulent refunds through over 1,000 linked bank accounts.
Shockingly, the trio of lawyers managed 23 fake firms using a single email ID and mobile number. These firms generated fraudulent invoices worth Rs173 crore, with some falsely claiming to supply medical goods.
This case underscores vulnerabilities in the GST system, particularly in the verification process. The arrests of the key individuals, including Sharma and the lawyers, mark a significant step toward dismantling the network of fraudsters and ensuring stricter oversight in the future.
