In a startling discovery, tax authorities have busted a massive ₹67 crore GST fraud operating from a modest 10×10 square-foot shop tucked away in the narrow lanes of Khandsa village, just 12 kilometers from the bustling city center.
The tiny shop, which appeared to be nothing more than a small general store, was the unlikely nerve center of an elaborate scam involving fake invoices worth ₹97 crore. The fraudulent operation primarily focused on tobacco products and soft drinks, generating bogus transactions to claim illegitimate input tax credits (ITC) amounting to ₹66.6 crore.
According to officials, the scam was orchestrated through a web of fake companies and non-existent suppliers. The shop served as a front, with paperwork showing large-scale transactions, while no actual goods ever exchanged hands. The invoices were used to pass on fake ITC to multiple businesses, allowing them to evade taxes and inflate profits.
“A 10×10 shop running a multi-crore scam is a textbook case of how fraudsters exploit the GST system. It took extensive data analysis and ground-level verification to crack the case,” said a senior GST official.
The authorities have arrested one person linked to the scam and are investigating further to identify the beneficiaries of the fake credits. This incident highlights the need for stricter checks and digital audits to prevent such frauds in the future.
The scam came to light when tax officials flagged an unusually high volume of trade originating from the modest establishment within a short span. Acting on the red flag, a team from the Central GST Commissionerate in Gurgaon visited the location linked to the registration of multiple shell companies. What they found was a tiny shop with minimal inventory, serving merely as a facade for large-scale paper transactions.
“Our investigation leveraged GST Prime and the e-way bill system to trace the web of fictitious firms engaged in the paper trading of FMCG products without any physical movement of goods. This analysis eventually led us to the mastermind, who was running the entire operation from his small shop,” said Karan Singh, Assistant Commissioner of GST (CGST).
Singh further revealed that the investigation is now being broadened to scrutinize several traders and business owners in New Delhi who may be linked to the fraudulent network.
The accused, identified as Kumar, was apprehended on Friday and presented before the court, where he was remanded to judicial custody until March 5. He faces multiple charges under the GST Act, 2017.
Highlighting the growing complexity of tax fraud schemes, Singh noted, “This case is alarming not just because of the amount involved but because such an extensive scam was being orchestrated from a shop no bigger than a storeroom. It underscores the need for advanced surveillance and continuous vigilance in our tax system.”
Officials hinted that further disclosures were likely as the probe widened, with investigators digging deeper into the intricate web of companies involved in the tax evasion racket.
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