The GST Intelligence wing has dealt a significant blow to the “shadow economy” of Panipat after revealing a multi-crore fraud that exploited the digital tax system.
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The Modus Operandi: The perpetrators registered several “shell” companies using the identity documents of unsuspecting laborers and street vendors. These firms issued invoices for products like synthetic yarn and scrap metal to actual businesses, allowing the latter to claim an ITC refund from the government for taxes that were never actually paid.
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The Scale of Scrutiny: Investigations revealed that fake invoices amounting to ₹100 crore were generated within a span of just six months. The total tax evasion (illegal ITC claimed) is estimated to be around ₹18 crore to ₹22 crore.
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Technical Investigation: The DGGI used advanced data analytics and AI-based tracking of GST portals to identify a suspicious pattern of high-value transactions between firms with zero physical infrastructure. Raids were conducted at five locations across Panipat City and the industrial area.
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Legal Action: Cases have been registered under Section 132 of the CGST Act, 2017, which covers the offense of issuing invoices without the supply of goods. Authorities are now scrutinizing the bank accounts linked to these shell companies to recover the defrauded amount.
